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CONSUMERS*  COOPERATION 


THE  MACMILLAN  COMPANY 

mw  YORK  •   BOSTON  •  CHICAGO  •  DALLAS 
ATLANTA  •   SAN  FRANCISCO 

MACMILLAN  &  CO.,  Limitso 

LONOOM  •  BOMBAY  •   CALCUTTA 
MELBOURNE 

THE  MACMILLAN  CO.  OF  CANADA,  t«ll, 

TORONTO 


CONSUMERS' 
COOPERATION 


BY 

ALBERT  SONNICHSEN 


Jl3eto  pork 

THE  MACMILLAN  COMPANY 
1920 


AU  HffhU  reserved 


OOPTBIOBT,  1919 

bt  the  macmillan  company 


Set  ap  and  electrotyped.     Pablishcd,  September,  1919 


FOREWORD 

Until  the  war,  no  speaker  on  Consumers'  Cooperation 
could  escape  a  question  as  pertinent  as  it  was  monoto- 
nous :  "  Why  has  success  been  so  brilliant  and  con- 
tinuous in  England  and  other  European  countries  while 
results  are  so  meager  in  the  United  States  ?  "  For 
the  first  time  this  form  of  Cooperation  has  become  a 
serious  working  class  interest.  Extensively  and  in- 
tensively it  is  on  a  scale  which  makes  possible  if  not 
an  answer,  at  least  a  more  confident  prophecy  that  we 
are  to  take  our  place  in  this  world  attempt  to  make 
"  democratizing  industry "  something  more  than  a 
phrase. 

I  am  far  from  giving  it  as  a  primary  or  even  a  sec- 
ondary reason  why  cooperation  so  long  halted  in  this 
country,  but  it  has  been  sorely  hampered  by  muddling 
together  economic  activities  which  have  very  little  in 
common.  A  state  of  mind  in  which  Profit-sharing, 
Labor  Copartnership,  Citrous  Fruit  Companies,  Co- 
operative Creameries  and  the  like,  are  identical  with 
Consumers'  Cooperation,  is  one  in  which  progress  is 
embarrassed. 

No  one  will  read  Mr.  Sonnichsen's  admirable  study 
without  gratitude  that  once  for  all  he  has  cleaned  up 
his  subject.  No  American  writer  has  done  this  with 
so  much  lucidity  and  finality.  This  is  the  distinction, 
as  it  is  the  excellence  of  the  book.  There  is  up-to-date 
information,  with  cheering  accounts  of  the  extraordi- 
nary growth,  almost  boom,  of  the  movement.     The 


VI  FOREWORD 

volume  would  be  well  worth  having  for  this  alone. 
Its  analysis  and  logical  approach,  however,  are  what 
students  and  those  struggling  with  cooperative  enter- 
prises will  find  most  illuminating.  It  is,  moreover,  on 
the  side  of  its  severe  consistencies  that  it  may  be  found 
open  to  criticism.  Only  as  in  England,  where  "  pro- 
duction "  has  been  brought  definitely  into  the  service 
of  the  store;  only  where  goods  are  made  not  for  profit 
but  for  consumers'  use,  have  economic  interests  been 
in  any  real  sense  harmonized.  Those  who  believe  that 
Consumers'  Cooperation  is  to  conquer  the  world's  in- 
dustry find  in  that  mastery  the  solution  of  conflicting 
business  interests.  Those  of  us  who  hold  that  private 
profit  and  interest  on  loans  are  still  utilities  and  are  to 
remain  so  for  any  calculable  future  will  still  think  of 
Consumers'  Cooperation  as  only  a  partner  in  making 
and  distributing  wealth.  However  powerful  the  part- 
ner becomes  he  will  be  beset  by  business  interests  which 
conflict  as  do  those  of  borrower  and  lender  —  buyer 
and  seller.  To  those  of  this  opinion  Mr.  Sonnichsen's 
book  is  all  the  more  welcome. 

As  a  matter  of  fact,  we  are  to  struggle  on  in  a  most 
illogical  and  tangled  world.  Farmers'  Elevators,  Co- 
operative marketing  and  cheese  factories  are  to  remain. 
They  are  very  awkward  from  Mr.  Sonnichsen's  point 
of  view,  but  we  must  tolerate  them  as  a  part  of  the 
total  Cooperative  Movement.  We  have  to  do  this  in 
the  teeth  of  inconsistencies  as  we  do  with  other  prob- 
lems in  practical  life. 

Economic  organization  and  even  economic  theory 
which  bring  the  interest  of  producer,  necessary  mid- 
dlemen and  consumers  into  final  harmony  are  at  a  far 
and  safe  distance.  Meantime  the  author  has  done 
something  better  than  the  impossible.  More  than  any 
book    since   that   of    Beatrice    Potter    (Mrs.    Sidney 


FOREWORD  Vll 

Webb)  —  which  Schmoller  called  "  road  breaking  " 
—  Mr.  Sonnichsen  has  lifted  Consumers'  Cooperation 
into  its  own  clear  light.  This  will  win  him  the  praise 
he  deserves. 

John  Graham  Brooks. 


INTRODUCTORY  REMARKS 

It  has  only  been  within  the  past  six  or  eight  months 
that  we  Americans  have  begun  taking  stock  of  the  eco- 
nomic results  of  the  war.  In  Europe  the  peoples  of 
the  belligerent  countries  began  contemplating  costs 
after  the  first  year  or  two  of  fighting,  one  by  one,  in 
the  order  in  which  they  were  later  vanquished.  Now 
we  are  all  estimating  costs  —  and  find  them  appal- 
ling. 

Among  all  the  peoples  involved  in  the  war,  directly 
or  indirectly,  there  has  developed  a  realization  that 
the  present  industrial  system  is  inadequate  in  repair- 
ing such  damage  as  the  war  has  caused.  Never  before 
have  people  felt  so  strongly  that  social  need,  rather 
than  personal  profit,  should  be  the  stimulus  behind 
production.  In  proportion  to  the  degree  to  which 
it  has  been  stricken  each  nation  has  turned  to  more 
or  less  radical  remedies,  ranging  from  extreme  Com- 
munism to  government  regulation.  Russia  and  Hun- 
gary, in  black  despair,  have  resorted  to  what  we  call 
Bolshevism,  not  because  the  average  Russian  or  Mag- 
yar has  suddenly  become  imbued  with  an  enthusiasm 
for  social  equity,  but  because  collectivism  seems  to  him 
to  promise  the  quickest  relief  from  his  present  eco- 
nomic misery.  Even  in  England  and  this  country 
the  people  have  resorted  to  mildly  Socialistic  measures 
for  relief ;  government  control.  Everywhere  there 
has  been  the  same  realization  of  the  inability  of  private 
industry  to  meet  the  needs  of  a  critical  situation. 

When  so  conservative  an  institution  as  the  Catholic 
Church   in  America  officially   recommends,   however 


X  INTRODUCTORY   REMARKS 

vaguely,  the  democratic  partnership  of  Labor  in  the 
industries  of  the  country,  it  may  safely  be  taken  for 
granted  that  this  loss  of  faith  in  private  industry  is 
fundamental;  that,  as  Lloyd  George  once  remarked 
during  the  war,  things  will  never  again  be  the  same 
as  they  were  before  the  war.  Economic  pressure  is 
no  less  now  than  it  was  during  the  struggle.  Without 
discussing  the  injustice,  or  justice,  of  it,  people  are 
going  to  become  more  and  more  discontented  as  they 
continue  paying  back  the  money  which  was  advanced 
by  the  prosperous  classes  to  meet  the  immediate  ex- 
penses of  the  war,  more  often  as  a  good  investment 
than  as  an  act  of  patriotic  sacrifice. 

In  every  country  there  is  now  an  overhanging  fear 
of  Bolshevism,  visible  in  the  frantic  endeavor  to  sup- 
press "  propaganda."  This  is  in  itself  nothing  more 
than  an  admission  on  the  part  of  the  prosperous  classes 
that  the  masses  are,  and  have  reason  to  be,  discon- 
tented with  conditions  as  they  are,  for  no  amount  of 
argument  can  make  suicide  seem  alluring  to  a  con- 
tented man. 

The  masses  are  discontented.  They  are  groping 
around  for  remedies.  In  proportion  to  the  economic 
pressure  which  weighs  them  down  they  will  act  ju- 
diciously and  carefully,  or  impulsively  and  quickly. 
In  the  latter  case  we  shall  have  Bolshevism.  We  shall 
have  evolution,  or  revolution.  There  will  be  no  stand- 
ing still;  even  the  masses  of  China  have  begun  to  move 
ahead. 

Still  another  element  besides  economic  pressure  will 
influence  the  people  in  their  choice  between  the  two 
methods,  and  that  is  education,  knowledge.  To  the 
ignorant  mind  the  simpler  method  makes  first  appeal, 
and  a  blind  upsetting  of  things  that  are  is  the  essence 
of  simplicity.     The  man  who  knows,  from  the  expe- 


INTRODUCTORY   REMARKS  XI 

rience  of  history,  that  every  poHtical  revolution  brings 
its  own  reaction ;  that  permanent  social  changes  for  the 
better  have  invariably  come  about  through  evolution- 
ary growth,  will  resort  to  violent  revolution  only  under 
great  pressure  —  or  if  the  processes  of  evolution  are 
arbitrarily  checked  by  those  in  power.  Let  this  man 
freely  study  the  theories  which  the  Bolshevist  has  to 
offer  him.  Let  him  compare  them  with  the  theories 
of  the  other  propagandas  which  have  as  their  object 
a  radical  change  in  the  present  social  system.  Then 
let  him  make  a  further  comparison  between  the  ab- 
stract theories  and  the  practical  results  of  concrete 
efforts  in  the  same  direction.  Provided  that  present 
misery  does  not  blind  his  judgment,  this  man  will  not 
decide  in  favor  of  overnight  adventures.  It  is  far 
more  likely  that  he  will  put  his  shoulder  to  the  wheel 
and  push  hopefully  ahead,  realizing  perhaps  that  the 
ideal  will  not  be  attainable  within  his  own  lifetime,  or 
ever,  in  all  likelihood,  but  that  over  and  over  again  he 
will  meet  on  his  way  such  minor  triumphs  as  will  not 
only  afford  him  the  desired  relief  in  a  generous  meas- 
ure, but  will  send  the  realization  of  legitimate  conquest 
glowing  through  his  being. 

It  is  as  such  an  alternative  that  Consumers'  Coop- 
eration presents  itself.  And  let  me  here  emphasize 
this  point:  that  Cooperation  is  an  alternative  to  rev- 
olutionary and  political  Socialism,  not  an  antidote,  or 
a  compromise.  For  in  its  ultimate  aims  it  is  quite  as 
revolutionary  as  Bolshevism,  and  much  more  so  than 
the  programs  of  the  political  Socialist  parties.  Even 
so  conservative  an  exponent  of  its  purposes  as  the  late 
Earl  Grey,  formerly  Governor-General  of  Canada,  de- 
clared that  "  it  is  in  our  power,  if  we  are  only  suffi- 
ciently in  earnest,  to  secure  the  triumphant  realization 
of  a  future  international,  cooperative  commonwealth 


Xll  INTRODUCTORY   REMARKS 

which  we  beheve  will  one  day  be  coequal  and  coex- 
tensive with  the  whole  civilized  world."  Lenin  him- 
self has  uttered  nothing  more  radical  than  that. 

It  is  in  method  that  Cooperation  is  opposed  to 
Bolshevism,  nor  is  it  improbable  that  many  a  sincere 
Bolshevist  chooses  violent  or  political  revolution  as  a 
means  to  his  end  only  because  he  can  conceive  of  no 
other.  The  Cooperator,  however,  is  opposed  to  such 
measures,  not  because  they  are  morally  wrong,  for  if 
there  is  an  end  which  justifies  war,  there  may  also  be 
an  ideal  which  justifies  revolution,  but  because  he  be- 
lieves that  they  are  economically  wrong;  that  they 
cannot  achieve  the  end  they  seek. 

The  masses  are  groping  around  in  the  darkness 
for  remedies,  a  remedy.  They  have  definitely  turned 
their  backs  on  the  old  order.  Wholly,  or  in  part,  it  is 
doomed;  only  the  most  ignorant  and  stupid  reaction- 
ary can  deny  that.  It  is  in  the  interest  of  all  alike  that 
they  choose  wisely. 

It  is  with  the  firm  conviction  that  the  people  will 
choose  wisely  that  the  Cooperator  presents  his  plan 
for  a  regenerated  world. 

Though  Cooperation  is  older  than  all  the  Socialist 
programs,  it  has  only  been  within  the  past  few  years 
that  it  has  become  conscious  of  its  own  social  signifi- 
cance, of  its  revolutionary  tendency.  Being  a  move- 
ment of  spontaneous  growth,  it  has  had  few  exponents 
of  its  philosophy.  In  a  certain  sense  it  has  no  phi- 
losophy. It  has  steadfastly  ignored  all  theories  pro- 
pounded for  it  and  has  continued  on  its  way,  bound 
by  economic  laws  which  may  be  defined  only  by  deduc- 
tion. Until  recently  its  practical  experience  was  too 
limited  for  this  purpose.  For  this  reason,  too,  writers 
on  the  subject  have  invariably  confused  its  boundaries 
and  extended  them  into  other  fields  of  joint  action, 


INTRODUCTORY   REMARKS  Xlll 

associating  the  movement  with  enterprises  thoroughly 
out  of  sympathy  with  it. 

During  the  past  few  years,  but  especially  during  the 
war,  Consumers'  Cooperation  has  been  sharply  defin- 
ing itself,  and  now  it  leaves  no  room  in  which  to  doubt 
its  methods  and  ultimate  purposes.  From  what  it  has 
already  achieved  materially  we  are  able  to  deduce  a 
theory  of  industrial  reorganization  complete  within 
itself,  slow  and  peaceful  in  its  processes  of  forma- 
tion, but  definite  in  the  end  to  be  attained. 

Nor  should  this  subject  be  of  merely  abstract  in- 
terest to  us  Americans,  for  already  the  Cooperative 
Movement  has  firmly  established  itself,  not  only  in  the 
United  States,  but  throughout  the  two  American  conti- 
nents. It  is  here,  not  only  as  a  tH"eory,  but  as  an  es- 
tablished fact,  well  emerged  from  the  experimental 
stage  of  its  development. 

The  present  work  makes  no  pretensions  to  being  a 
complete  history  of  the  International  Cooperative 
Movement.  It  does,  however,  outline  broadly  the  sig- 
nificant events  in  the  early  development  and  recent 
growth  of  the  movement,  hitherto  dispersed  through- 
out a  multitude  of  reports,  pamphlets,  year  books,  offi- 
cial organs,  consular  and  government  reports  and 
numerous  books  devoted  to  other  irrelevant  matter. 
Some  books  there  are,  indeed,  treating  the  subject 
from  its  modern  point  of  view,  notably  Mrs.  Sidney 
Webb's  "  The  Cooperative  Movement  in  Great  Brit- 
ain," and  Percy  Redfern's  "  History  of  the  C.  W.  S. 
(Cooperative  Wholesale  Society),"^  but  these  two 

*  Two  recent  books,  "  Cooperation,  the  Hope  of  the  Con- 
sumer," by  Emerson  P.  Harris,  and  "  Cooperation  and  the 
Future  of  Industry,"  by  Leonard  S.  Wolf,  are  important  contri- 
butions to  the  literature  on  Consumers'  Cooperation,  the  first 
on  account  of  its  practical  suggestions,  the  second  because  of 
its  breadth  of  vision. 


XIV  INTRODUCTORY   REMARKS 

writers  cover  only  a  limited  field.  They  do  not  pre- 
sent an  account  of  the  most  remarkable  achievement 
of  Consumers'  Cooperation;  the  part  it  has  played 
in  the  war  and  the  promise  it  gives  of  being  perhaps 
the  most  important  factor  in  reconstruction. 


CONTENTS 

PAOB 

Foreword *.     .       v 

Introductory  Remarks ix 

CHAPTER  I 
Searching  for  Remedies 3 

The  boundaries  of  Consumers'  Cooperation.  Steam- 
driven  machinery  brings  about  a  new  system  of  in- 
dustry. The  evil  conditions  brought  about  by  the  new 
system.  Many  remedies  advocated.  Robert  Owen 
leads  the  search  for  a  solution.  His  schemes,  and  why 
they  failed. 

CHAPTER  n 
The  First  Sproutings ii 

The  working  classes  grope  for  remedies.  They  or- 
ganize the  first  consumers'  societies.  The  cooperative 
store  in  Fenwick,  Scotland.  The  flour  milling  society 
of  Hull.  Dr.  William  King,  the  first  prophet  of  the 
modern  Cooperative  Movement.  His  appeal  to  the 
working  classes.  He  emphasizes  the  importance  of  or- 
ganizing as  consumers.    His  philosophy  outlined. 

CHAPTER  HI 
The  Twenty-eight  Weavers  of  Rochdale    .     .     22 

Chartism,  the  repeal  of  the  corn  laws  —  the  period 
of  nineteenth  century  Bolshevism.  The  masses  again 
consider  evolutionary  methods.  The  weavers  of  Roch- 
dale raise  the  banner  of  the  modem  Cooperative 
Movement.  The  plan  which  made  Rochdale  famous. 
Dr.  King's  idealism  made  practicable. 

CHAPTER  IV 

Federation 28 

The  rapid  growth  of  the  consumers'  cooperative 
store  movement    The  leaders  discuss  federation.    The 

XV 


XVI  CONTENTS 

PAGE 
fight  against  adverse  legislation,  and  its  success.  The 
English  Cooperative  Wholesale  Society  is  established. 
The  obstacles  confronting  its  early  development.  The 
British  Cooperative  Union,  the  educational  federation 
of  the  British  societies. 

CHAPTER  V 
Cooperative  Production 40 

The  necessity  of  obtaining  control  of  a  cooperative 
source  of  production.  The  Christian  Socialists,  and 
the  plan  they  advocated.  The  Self-governing  work- 
shop. The  English  Wholesale  Society  embarks  on 
manufacturing  on  its  own  account.  The  bitter  strug- 
gle between  the  advocates  of  the  two  systems.  The 
Christian  Socialists  appeal  to  the  yearly  cooperative 
congresses.  The  Wholesale  Bank  gives  financial  as- 
sistance to  the  self-governing  workshop  societies  and 
is  thereby  brought  to  the  verge  of  bankruptcy. 

CHAPTER  VI 
Cooperation  Spreads  Abroad 55 

The  United  States  one  of  the  first  countries  to  imi- 
tate the  example  of  the  British  Cooperators.  The 
early  societies  in  Switzerland  —  France  —  Denmark. 
Germany  is  hampered  by  the  middle  class  preachings 
of  Schulze-Delitzsch.  The  split  in  the  German  move- 
ment. Growth  in  Italy.  Early  societies  in  Russia. 
Organization  of  the  wholesale  societies. 

CHAPTER  Vn 
The  International 63 

The  community  of  economic  interests  of  all  nations. 
R  de  Boyve,  a  French  Cooperator,  proposes  an  inter- 
national federation.  The  British  accept  the  idea.  The 
Christian  Socialists  block  the  proposal  to  further  their 
own  theories.  Attempt  to  organize  an  international 
organization  independent  of  the  British  cooperative 
societies.  Its  conservative  character.  The  British 
Cooperative  Union's  support  is  finally  soHcited.  The 
first  international  congress,  held  in  London,  in  1895. 
The  fight  between  the  partisans  of  profit  sharing  and 
true  Cooperation,    Muddle  headed  reformers. 


CONTENTS  XVll 

CHAPTER  VIII  PACE 

Evolution   of   the   International   Cooperative 

Alliance 74 

The  International  straightens  its  crooked  back.  The 
Socialists  change  their  attitude  in  favor  of  Coopera- 
tion. The  consumers'  theory  of  cooperative  produc- 
tion is  justified.  The  International  Congress  at  Buda 
Pesth ;  its  revolutionary ,  declaration.  The  middle- 
class  societies  withdraw.  Socialists  attempt  to  capture 
the  congress  held  at  Cremona,  in  1907.  Aims  of  Co- 
operation, as  voiced  by  Luigi  Luzzatti,  Italian  states- 
man, and  Earl  Grey. 

CHAPTER  IX 
Growth 85 

The  need  of  specially  trained  men  for  cooperative 
industry.  The  Scottish  Wholesale  Society  initiates  a 
big  productive  enterprise.  Its  factories  at  Shieldhall, 
The  English  Wholesale  fights  the  private  transporta- 
tion lines.  It  takes  up  flour  milling.  Breaking  the 
soap  trust.  The  bitter  fight  between  the  Scottish 
wholesale  and  the  Scottish  traders.  Swedish  whole- 
sale smashes  the  sugar  and  margarin  trusts.  The 
Swiss  Wholesale  buys  out  the  Swiss  meat  trust.  The 
English  Wholesale  begins  agricultural  production. 
Cooperative  production  by  local  societies.  The  United 
Cooperative  Baking  Society  of  Glasgow.  Cooperative 
housing.     Status  of  the  Movement  in  1914. 

CHAPTER  X 
The  "  Maisons  du  Peuple  "  of  Belgium    .     .     .  107 

Early  failure  of  Belgian  Cooperation.  Eduarde  An- 
seele's  proposal  to  the  weavers'  union  of  Ghent.  The 
Vooruit  baking  society.  Surplus  savings  devoted  to 
social  benefits.  The  fight  with  the  Catholic  Church. 
The  Belgian  pleasure  palaces.  The  Vooruit  captures 
the  Royal  Clubhouse  of  Ghent.  The  cooperative  pe- 
destrian clubs.  Interchange  of  children  between  Flem- 
ish and  Walloon  Cooperators.  The  Maison  du  Peuple 
of  Brussels  saves  a  quarrymen's  strike.  Belgian  move- 
ment handicapped  by  alliance  to  Socialist  party  and 
lack  of  cooperative  production. 


XVin  CONTENTS 

CHAPTER  XI  PACK 

Cooperation  During  the  War 121 

Cooperators  fear  the  war.  The  food  panic  in  Great 
Britain,  and  how  the  cooperative  societies  stabilized  the 
situation.  The  rush  on  the  cooperative  stores.  New 
members  excluded.  Tremendous  growth  in  trade  and 
membership  at  the  end  of  the  year.  Abnormal  de- 
velopment in  other  belligerent  countries.  German  sol- 
diers refuse  to  shell  French  cooperative  store  build- 
ings. Growth  of  the  Cooperative  Movement  during 
the  whole  war  period.  German  Cooperators  denounce 
the  war.  Development  in  the  neutral  countries.  The 
Cooperative  boom  in  Russia.  The  Russian  Cooper- 
ators and  the  Bolsheviki. 

CHAPTER  Xn 

Cooperation  in  the  United  States  ....  145 
Early  societies  in  New  England.  The  First  move- 
ment ends  with  the  Civil  War.  Materialistic  spirit  of 
the  Granger  movement.  The  Sovereigns  of  Industry 
and  their  temporary  success.  The  Knights  of  Labor. 
The  revival  in  California.  The  movement  in  the 
Northwest.  The  East  Side  Jews  of  New  York  spread 
the  idea.  What  came  of  their  eflforts.  The  Coopera- 
tive League  of  America,  The  stores  in  southern  Il- 
linois. The  Tri-State  Cooperative  Society  of  Penn- 
sylvania. The  Seattle  cooperative  society  buys  out  the 
municipal  market.  The  cooperative  bakery  which  pro- 
tested against  the  Government's  high  prices.  The  ci- 
garmakers'  cooperatives  of  Tampa,  Fla.,  fight  the 
wholesalers.  American  Federation  of  Labor  indorses 
Cooperation. 

PART  II 

COOPERATION  AS  A  FACTOR  IN  THE 
SOCIAL  REVOLUTION 

CHAPTER  I 

Limiting  the  Field  to  Revolutionary  Coopera- 
tion      171 

Confusion  between  Consumers'  Cooperation  and 
other  forms  of  joint  effort.    Fundamental  difference 


CONTENTS  XIX 

PAGE 
between  Consumers'  Cooperation  and  agricultural  sell- 
ing societies.  The  latter  purely  capitalistic.  Bitter 
struggle  between  the  two  forms  of  cooperative  organi- 
zation in  Switzerland.  How  the  consumers'  societies 
propose  to  conduct  agricultural  production.  The  anti- 
social character  of  the  Schulze-Delitzsch  credit  un- 
ions.   Workingmen's  credit  unions. 

CHAPTER  II 
Cooperation  and  Socialism 185 

Cooperation  and  Socialist  both  demand  industry  for 
use  instead  of  for  private  profit.  Cooperation  against 
state  ownership.  It  does  not  recognize  the  "  class 
struggle."  Diversity  of  interests  between  capitalist 
groups.  Social  character  of  Consumers'  Cooperation. 
Free  will  the  basis.  Cooperation  in  politics.  But  it  is 
essentially  an  economic  movement.  Why  Cooperation 
will  probably  never  become  universal.  Room  for  per- 
sonal initiative  and  invention.  The  psychological  dif- 
ferences between  Cooperation  and  Socialism.  Coop- 
eration is  Anarchism  rationalized. 

CHAPTER  III 
Cooperation  and  Labor 205 

Affinity  between  ideals  of  the  early  Christian  So- 
cialists and  modern  Syndicalism.  Labor  under  Coop- 
eration. The  natural  sympathy  of  Cooperative  organ- 
izations for  Labor  movements.  English  Wholesale 
sends  shiploads  of  provisions  to  the  Dublin  strikers. 
Even  Lenin  recognizes  Cooperation  as  a  labor  move- 
ment. A  definition  of  a  workingman.  How  Coopera- 
tion transforms  the  middle  classes  into  workers. 
Workers  and  consumers  identical.  Syndicalism  and 
Cooperation  contrasted.  Labor  should  be  subservient 
to  society  as  a  whole.  Consumption  the  basis  of  ail 
industry. 


PART  I 
AN  HISTORICAL  OUTLINE 


CONSUMERS'  COOPERATION 

CHAPTER  I 

SEARCHING    FOR    REMEDIES 

In  tracing  cooperation  back  to  its  origin  there  is  dan- 
ger of  considering  the  word  in  its  dictionary  sense, 
which  would  send  us  groping  about  in  the  gloom  pre- 
ceding the  dawn  of  history,  when  savages  first  began 
to  organize  raids  on  their  neighbors.  Broadly,  co- 
operation means  any  kind  of  joint  effort,  for  good  or 
bad.  The  kind  of  cooperation  we  are  considering 
does  not  even  include  every  kind  of  good  joint  action. 
The  movement  is,  in  fact,  unfortunate  in  its  name  in 
that  it  fails  to  limit  it,  or  define  it.  One  has  only  to 
run  through  the  card  index  of  any  large  library  to  see 
what  a  multitude  of  varying  forms  of  human  enterprise 
the  name  covers. 

The  specific  kind  of  cooperation  here  considered  has 
most  commonly  been  called  "  distributive  cooperation." 
but  this  gives  a  wholly  erroneous  impression,  for  it  is 
production  which  has  given  it  its  significance.  Also, 
it  has  been  called  the  "  store  movement,"  for  the  reason 
that  it  had  its  origin  in  the  cooperative-store  societies. 
More  recently  the  name  "  Consumers'  Cooperation  " 
has  been  applied,  and  this  does  give  a  fairly  correct 
impression,  distinguishing  it  from  those  other  forms 
of  joint  effort  with  which  it  has  generally  been  lumped 

3 


4  CONSUMERS     COOPERATION 

and  with  which,  in  methods,  principles,  and  aims,  it 
has  nothing  in  common. 

The  conditions  which  gave  birth  to  the  Consumers' 
Cooperative  Movement  arose  from  the  invention  of 
steam-driven  machinery.  It  was  nursed  in  the  same 
cradle  with  political  Socialism  and  Trade-Unionism. 
Indeed,  one  man,  Robert  Owen,  is  credited  with  being 
the  father  of  all  three.  The  same  cause,  or  causes, 
undoubtedly  did  create  the  three  and  the  same  condi- 
tions continued  to  develop  them.  For  a  while,  in  fact, 
all  three  forms  of  effort  were  included  under  the  same 
name:  Cooperation.  Eventually  Trade-Unionism  and 
political  Socialism  acquired  more  definite  forms  of 
their  own  and  were  named  accordingly.  Cooperation, 
being  the  slowest  to  develop,  retained  the  old  con- 
fusing title.  To-day,  however.  Cooperation  stands 
forth  very  distinct  from  the  other  two  movements. 
At  first  glance  it  may  seem  very  closely  allied  with 
Socialism,  but  the  two  movements  are  widely  different 
in  their  methods  and,  in  so  far  as  Socialism  may  mean 
state  ownership,  in  their  fundamental  principles. 

We  need  not  go  very  deeply  into  the  revolutionary 
changes  wrought  by  the  introduction  of  steam-driven 
machinery.  There  are  sociologists  who  still  look  back 
rather  regretfully  to  the  preceding  period  of  handi- 
crafts industry,  when  every  worker  owned  his  own 
tools,  when  all  things  were  handmade,  and  most  men 
were,  or  eventually  became,  their  own  masters. 

Then  came  the  machines,  one  after  another,  in  rapid 
succession.  Beginning  with  weaving,  they  invaded 
one  trade  after  another.  The  hand  tools  were 
scrapped  and  their  owners  were  set  to  work  feeding 
the  raw  material  to  the  machines  in  big  factory  build- 
ings. By  far  the  most  important  machine  that  pres- 
ently made  its  appearance  was  one  which  apparently 


SEARCHING    FOR    REMEDIES  5 

produced  nothing:  the  railway  locomotive.  By  af- 
fording cheap  transportation  it  opened  up  to  each 
factory  the  whole  world  a?  a  market,  and  gradually 
it  enabled  factory  owners  to  concentrate  production. 

It  would  seem  that  the  invention  of  machines  which 
could  perform  the  labor  of  men,  which  could  increase 
the  production  of  wealth  many  times  over,  must  result 
in  a  great  benefit  to  society  as  a  whole.  But  that  was 
by  no  means  the  immediate  result. 

The  cost  of  production  of  all  those  commodities  in 
whose  manufacture  machinery  could  be  employed  was 
indeed  cheapened.  Cotton,  which  had  been  more  ex- 
pensive than  wool,  now  became  so  cheap  that  it  no 
longer  paid  the  housewife  to  spin  and  weave  at  home 
and  the  picturesque  spinning  wheel  was  relegated  to 
the  attic.  Household  furniture  was  no  longer  hand- 
made, because  steam  saws  could  cut  the  timber  and 
factory  organization  could  nail  it  together  at  much 
less  cost.  And  all  the  products  of  foreign  countries, 
distributea  all  over  the  country  by  cheap  railroad  trans- 
portation, could  now  be  had  at  continually  decreasing 
prices. 

But  these  advantages  were  more  than  offset  by  the 
fact  that  the  machine  which  could  do  the  work  of  ten 
men  retained  only  one  as  its  attendant,  then  threw  the 
other  nine  out  of  employment.  These  nine  could  not 
continue  with  their  hand  tools  because  they  could  not 
sell  their  handmade  products  so  cheaply  as  the  ma- 
chines could  produce  them,  and  still  earn  enough  to 
live.  Finally,  it  was  discovered  that  a  woman  or  a 
child  could  attend  the  machine  as  well  as  a  man,  and  so 
the  tenth  man  was  also  thrown  out  of  employment. 
To  save  the  family  from  starvation,  his  wife  or  one  of 
his  children  took  his  place,  more  usually  his  child. 
And  so  began  the  evil  of  child  labor. 


6  CONSUMERS     COOPERATION 

The  great  saving  in  economy  which  the  machines 
effected  was  reaped  entirely  by  a  limited  class,  by  the 
men  who  owned  them.  These  waxed  rich  and  power- 
ful and  developed  into  the  modern  capitalists.  The 
workers  were  left  with  nothing  but  their  obsolete 
hand  tools. 

Thus,  within  the  space  of  a  comparatively  brief  pe- 
riod, in  the  early  part  of  last  century,  a  very  critical 
situation  was  precipitated  in  England  and  Scotland, 
where  the  machines  had  been  invented.  Thousands 
and  thousands  of  workers  were  finding  themselves 
without  employment,  their  numbers  being  increased 
by  each  new  machine,  and  thousands  of  women  and 
small  children  were  compelled  to  enter  the  factories  to 
save  their  menfolk  and  themselves  from  complete 
starvation.  Skilled  adults  were  not  wanted,  but  cheap 
child  labor  was  so  much  in  demand  that  the  orphan 
asylums,  even  the  insane  asylums,  were  being  emptied. 

Even  the  upper  classes  grew  disturbed  over  the  situ- 
ation, some  from  a  genuine  sympathy  for  suffering 
humanity,  others  through  fear  of  a  popular  revolution, 
as  had  occurred  just  previously  in  France.  Then  ap- 
peared the  social  philosophers,  the  scholars,  who  began 
studying  causes  and  effects,  that  they  might  propound 
remedies  for  the  internal  convulsions  threatening  the 
nation.  One  of  the  most  popular  of  these,  among  the 
machine  owners,  at  least,  was  a  clergyman  by  the  name 
of  Malthus.  Seeing  so  many  unemployed,  he  drew  the 
conclusion  that  there  were  too  many  people,  so  he  ad- 
vised the  working  classes  to  breed  fewer  children. 
Eventually  the  machine  owners  discovered  that  the 
working  people  were  also  consumers,  and  then  Malthus 
lost  his  vogue. 

The  workers  themselves,  being  more  directly  con- 
cerned, placed  the  blame  nearer  to  the  true  source  of 


SEARCHING    FOR   REMEDIES  7 

the  trouble.  Instinctively  they  felt  that  the  machines 
were  somehow  the  cause  of  their  deepening  miseries 
and  blindly  they  attacked  them.  All  over  the  country 
mobs  rioted,  and  sometimes  they  even  succeeded  in 
burning  factories,  destroying  machines,  and  assaulting 
their  owners.  All  over,  among  the  working  people, 
rose  a  cry  for  the  destruction  of  the  machines  and  a 
return  to  the  good  old  days  of  hand  industry,  when 
all  had  at  least  an  assurance  of  daily  bread. 

The  rioting  and  violence  being  futile,  the  workers 
organized  secret  societies,  whose  purpose  was  to  limit 
the  machines.  The  machine  owners,  who  were  now 
becoming  politically  predominant,  responded  by  hav- 
ing the  anti-combination  laws  passed  by  Parliament, 
which  forbade  the  workers  to  organize.  Thus  began 
the  Trade-Union  Movement  and  the  eternal  struggle 
between  Capital  and  Labor. 

Out  of  all  this  mad  muddle  rose  a  few  clear  minds, 
a  few  men  who,  by  intuition  rather  than  by  reason, 
grasped  at  fundamental  causes.  One  of  the  foremost 
of  these  was  Robert  Owen. 

Child  labor  especially  roused  his  deepest  indigna- 
tion and  he  raised  his  voice  in  violent  protest.  And, 
curiously  enough,  he  was  himself  a  machine  owner, 
one  of  the  fortunate  ones  who  had  secured  ownership. 
Thus  he  had  come  into  very  close  contact  with  the 
situation  and  knew  it  at  firsthand. 

"  Robert  Owen,"  says  an  old  edition  of  "  Chambers' 
Encyclopedia,"  "  was  a  man  whose  life  will  go  down 
to  posterity  as  one  long  absurdity."  These  words 
represent,  not  the  opinion  of  posterity,  but  the  opinion 
with  which  the  upper  classes  of  his  own  times  regarded 
Owen.  At  first  they  laughingly  listened  to  him  and 
humored  the  schemes  which  he  proposed  as  remedies. 
He  was  very  intimate  with  the  lords  and  ladies  of  that 


8  consumers'  cooperation 

time ;  probably  no  single  man  was  personally  acquainted 
with  so  many  people  in  high  places  as  he.  The  Queen's 
father,  the  Duke  of  Kent,  was  so  intimate  with  him 
that  he  often  borrowed  money  from  him,  which  the 
Queen  scrupulously  repaid  after  her  father's  death. 
Probably  this  may  account  for  the  very  friendly  atti- 
tude which  the  royal  family  ever  afterward  maintained 
toward  anything  that  went  under  the  name  of  Cooper- 
ation. 

But  in  later  years  Robert  Owen  fell  from  the  grace 
of  the  great  majority  of  people  in  high  places,  and 
from  being  an  "  absurd  "  person  he  became  the  incar- 
nation of  evil,  and  his  disciples  were  sent  to  prison  and 
otherwise   persecuted. 

Owen  was  part  owner  and  manager  of  the  New 
Lanark  Twist  Company,  in  New  Lanark,  on  the  Clyde, 
in  Scotland.  On  taking  over  the  management  of  this 
manufacturing  enterprise,  in  1800,  he  found  five  hun- 
dred children  employed  there,  chiefly  recruited  from 
the  workhouses  and  orphan  asylums  of  Edinburgh, 
ranging  from  six  to  eight  years  of  age,  their  working 
hours  being  from  six  in  the  morning  till  seven  at  night. 
The  adults,  mostly  women,  worked  under  even  harder 
conditions. 

Owen  at  once  raised  wages,  reduced  the  hours  of 
labor,  and  created  an  establishment  not  unlike  the 
Ford  automobile  factories  of  our  day.  For  the  little 
children  he  established  schools  in  which  corporeal  pun- 
ishment, even  harsh  words,  were  forbidden,  and  games, 
singing,  and  dancing  were  considered  more  important 
than  book  lessons.  He  was,  at  any  rate,  the  father 
of  public  education  and,  to  no  small  degree,  he  antici- 
pated Dr.  Montessori. 

Gradually  Owen  began  to  evolve  schemes  for  the 
amelioration  of  the  working  people  on  a  much  more 


SEARCHING    FOR    REMEDIES  9 

extensive  scale.  One  of  the  first  of  his  bigger  ideas 
was  the  formation  of  communistic  colonies,  where  the 
colonists  should  own  the  land  and  work  the  machin- 
ery of  production  in  common.  The  first  experiment 
of  this  kind  under  his  patronage  was  undertaken  in  this 
country,  in  New  Harmony,  Indiana,  in  1825.  It  failed 
eventually ;  such  enterprises  seem  to  succeed  only  when 
the  colonists  are  united  by  a  common  religious  fa- 
naticism. But  isolation  did  not  seem  to  be  a  necessary 
condition  in  Owen's  mind,  for  a  similar  communistic 
colony  was  founded  later  near  London.  Fourier,  over 
in  France,  was  also  advocating  similar,  though  more 
complicated,  enterprises,  and  his  writings  may  have 
influenced  Owen,  but  the  latter  was  by  far  the  more 
practical. 

The  idea  of  separate  communities  gradually  gave 
way  to  plans  for  organizing  cooperative  groups  of  pro- 
ducers who  should  own  the  machinery  of  single  fac- 
tories in  common  and  sell  their  products  directly  to 
the  public,  at  first  through  "  labor  exchanges,"  stores 
to  which  anybody  might  bring  things  to  be  sold,  in 
payment  for  which  they  would  receive  script  repre- 
senting the  value  of  the  actual  time  spent  in  producing 
the  goods.  These  labor  checks  could  then  be  used  in 
purchasing  other  commodities  in  the  exchange.  The 
fallacy  of  time  as  a  measure  of  value  was  speedily 
demonstrated  and  a  more  practical  system  of  valu- 
ation was  adopted. 

Jacob  Holyoake,  in  his  "  History  of  Cooperation," 
which  is  largely  a  record  of  these  early  ideas,  of  Owen 
and  others  equally  interested  in  solving  the  industrial 
difficulties,  devotes  one  very  thick  volume  to  all  the 
theories  and  remedies  proposed.  Some  of  them  do 
indeed  appear  absurd  to  us  now,  but  we  have  a  whole 
century  of  industrial  history  to  look  back  on  in  per- 


lO  CONSUMERS     COOPERATION 

spective,  while  these  early  ideaHsts  naturally  could  not 
yet  grasp  the  true  nature  of  the  new  conditions.  At 
any  rate,  theirs  was  a  divine  absurdity.  Chief  of  them 
all  was  Robert  Owen,  for  he  was  by  no  means  preju- 
diced in  favor  of  his  own  ideas.;  his  mind  was  ever 
open  to  those  of  others.  Most  of  his  wealth  went  to 
spreading  a  knowledge  of  what  remedies  were  being 
advocated  and  to  efforts  toward  putting  some  of  them 
into  practice.     He  died  comparatively  a  poor  man. 

But  Owen's  appeals  were  not  to  the  people  most 
interested,  the  working  people.  He  never  proposed 
that  the  many  enterprises  he  fathered  and  advo- 
cated should  be  financed  by  the  working  people  them- 
selves. That  was  the  business  of  either  rich  philan- 
thropists or  the  government. 

In  the  forms  in  which  he  advocated  them,  these  so- 
cial experiments  all  failed.  Yet  they  all  possessed  in 
common  a  vital  principle  which  survives :  the  principle 
that  the  machines  of  industry  should  be  collective  prop- 
erty. Owen  distinctly  grasped  the  fundamental  cause 
of  the  trouble  —  the  private  ownership  of  machinery 
performing  a  social  function.  His  cure  was  col- 
lectivism: the  partnership  of  all  the  people.  Where 
he  failed  was  in  fixing  the  form  in  which  this  prin- 
ciple should  be  applied,  and  surely  nothing  less  than 
a  god  could  have  fixed  that,  at  that  time. 

And  his  remedy  missed  its  most  important  ingredi- 
ent: Democracy. 


CHAPTER  II 

THE   FIRST   SPROUTINGS 

Of  all  that  large  throng  of  idealists  who  crowded  about 
the  dominating  figure  of  Robert  Owen  in  the  early 
years  of  last  century  the  great  majority  were  of  the 
upper  classes.  Deeply  worried  as  they  were  over  the 
miseries  of  the  masses,  they  were  not  of  the  masses 
themselves.  Later  on  strong  personalities  rose  here 
and  there  out  of  the  ranks  of  the  workers  and  joined 
the  devoted  army,  but  for  many  years  they  represented 
nothing  but  themselves.  Working-class  organization 
did  not  appear  till  a  much  later  date. 

Indeed,  few  of  these  theories  and  ideas  could  have 
inspired  the  rank  and  file  of  the  workers  with  hope, 
for  all  the  schemes  advocated  required  vast  sums  of 
money  for  their  practical  realization.  Like  idealists  of 
to-day,  Owen  and  his  followers  spoke  of  millions. 

But  there  is  ample  evidence  that  Owen's  essential 
idea,  collectivism,  did  make  an  impression  on  the 
working  people.  Or,  rather,  it  should  be  said  that 
they,  too,  in  their  own  way  conceived  that  idea,  for 
some  of  them  had  already  begun  their  humble  experi- 
ments before  Owen  had  proclaimed  himself.  These 
trifling  enterprises,  however,  failed  to  attract  Owen's 
attention.  Like  the  Socialists  of  to-day,  his  indigna- 
tion against  the  injustice  he  saw  about  him  rendered 
him  so  impatient  that  he  wanted  to  change  the  social 
order  overnight,  and  humble  beginnings  only  irritated 
him. 

II 


12  CONSUMERS     COOPERATION 

Now  it  will  be  noted  that  all  the  proposed  experi- 
ments of  the  idealists  centered  about  production.  In 
fact,  nearly  all  involved  communal  ownership  of  land, 
the  source  of  all  wealth.  And  there  is  a  certain  logic 
about  this  conception :  attempting  to  change  the  social 
order  by  obtaining  control  of  original  sources.  At 
any  rate,  it  was  clear  that  the  predominating  thought 
was  to  get  hold  of  the  tools  of  industry :  the  machines. 
Therefore  every  scheme  centered  at  this  point.  As  a 
theory  that  idea  survives  to  this  day  among  the  politi- 
cal Socialists  and,  especially,  in  the  program  of  the 
Syndicalists. 

But  aside  from  the  trade-unions,  which  were  purely 
defensive,  therefore  of  no  social  significance  from  a 
constructive  point  of  view,  it  is  noteworthy  that  the 
earliest  organizations  of  the  workers  took  hold  of  the 
problem  from  the  other  end :  distribution.  Naturally, 
this  was  not  the  result  of  any  social  philosophy  they 
had  conceived,  but  because  this  method  followed  the 
line  of  least  resistance. 

Surrounded  as  they  were  by  an  environment  of  bit- 
ter hardness,  they  regarded  the  situation  with  a  prac- 
tical eye,  uncolored  by  the  rosy  dreams  of  the  Utopians. 
They  felt  the  pressure  from  two  sides.  On  the  one 
hand  was  the  employer,  the  manufacturer,  who  ever 
sought  to  lower  their  wages.  On  the  other  hand  was 
the  storekeeper,  who  sold  them  the  necessities  of  life, 
ever  tending  to  raise  the  prices  of  the  goods  he  sold 
them. 

Against  the  employer  they  presented  a  purely  de- 
fensive front :  the  trade-union.  He  was  too  powerful 
to  attack.  But  the  shopkeeper  seemed  not  so  for- 
midable. To  acquire  collective  control  of  the  factory 
seemed  hopeless.  To  acquire  collective  control  of  the 
distributing  station,  the  store,  seemed  well  within  the 


THE   FIRST   SPROUTINGS  1 3 

realm  of  practical  realization.  Once  they  grasped  the 
idea  of  collective  ownership  they  applied  it  there,  to 
the  store.  Thus  they  organized  into  consumers'  so- 
cieties and  opened  their  own  stores. 

According  to  William  Maxwell,  author  of  "  The 
History  of  Cooperation  in  Scotland,"  there  were  hum- 
ble beginnings  of  this  nature  made  before  the  close  of 
the  sixteenth  century.  The  first  one  of  which  there 
is  any  record  was  initiated  in  a  small  village  in  Scot- 
land, Fenwick,  in  1769.  It  was  the  creation  of  a  few 
poor  weavers  who  saw  in  this  associative  effort  noth- 
ing more  than  a  means  whereby  they  could  expand  the 
purchasing  power  of  their  scanty  wages  by  a  few  pen- 
nies. Mr.  Maxwell  is  able  to  present  a  copy  of  an 
entry  in  the  minute  book  of  the  secretary,  which  prob- 
ably also  served  as  the  constitution  of  the  society: 

"9th  November,  1769. 
"  This  present  Day  it  is  agreed  upon  by  the  members  of 
our  Society  to  take  what  money  we  have  in  our  Box  and  buy 
what  victwal  may  be  thought  Nessassar  to  sell  for  the  benefit 
of  our  society.  And  the  managers  of  our  society  may  bor- 
row what  money  They  think  Proper  for  that  End  and  pur- 
pose. And  when  the  interest  is  paid  of  what  money  yow 
borrow  and  the  men  received  their  wages  for  buying  and 
selling  thes  Victwals  we  Deal  in  the  Society  will  both  reap 
the  benefit  and  sustain  the  loss  of  them,  and  If  any  member 
of  our  society  Pay  not  what  Quantity  of  Victwals  he  receives 
at  the  end  of  four  weeks  If  the  managers  require  it  of  him. 
Neither  him  nor  his  shall  have  any  more  right  to  our  soci- 
etys  Victwals  If  he  be  found  buying  Victwals  from  any 
other  and  leaving  the  trade  in  debt  of  the  same  according  to 
the  option  of  the  society. 

Alexander  Walles  Wm,  Hendry,  his  x  mark 

John  Wilson  James  Broun 

Andrew  Orr,  his  x  mark  William  Walker 

Robert  Walker  William  Bunten 

John  Burns  Thos.  Barr 

J.  Gemmel,  his  x  mark." 


14  consumers'  cooperation 

An  enterprise  differing  in  nature,  but  based  on  the 
same  cooperative  principle,  was  launched  in  Hull,  Eng- 
land, in  1795.  The  harvest  that  year  had  been  un- 
usually bad  and  the  price  of  wheat  was  higher  than 
it  had  been  for  a  generation  back.  Stirred  up  by  these 
depressing  conditions,  the  "  poor  inhabitants  "  of  the 
city  presented  a  petition  to  the  mayor,  as  follows  : 

"  We,  the  poor  inhabitants  of  the  said  town,  have  lately 
experienced  much  trouble  and  sorrow  in  our  selves  and  fami- 
lies on  the  occasion  of  an  exhorbitant  price  of  flour;  that, 
though  the  price  is  much  reduced  at  present,  yet  we  judge  it 
needful  to  take  every  precaution  to  preserve  ourselves  from 
the  invasion  of  covetuous  and  merciless  men  in  the  future. 
In  consequence  thereof,  we  have  entered  into  a  subscription, 
each  subscriber  to  pay  is  id  per  week,  for  four  weeks,  and 
6d  per  week,  for  four  weeks  more,  which  is  6s  4d  each,  for 
the  purpose  of  building  a  mill  which  is  to  be  the  subscribers', 
their  heirs,  executors,  administrators,  or  assigns  forever,  in 
order  to  supply  them  flour ;  but  as  we  are  conscious  that  this 
subscription  will  not  be  sufficient  to  bring  about  this  purpose, 
we  do  hereby  humbly  beseech  your  Worship's  advice  and 
assistance  in  this  great  undertaking,  that  not  only  we  but  our 
children  yet  unborn  may  have  cause  to  bless  you. 

Except  that  this  latter  undertaking  sought  and  re- 
ceived outside  aid,  these  two  are  each  a  representative 
type  of  a  great  number  of  cooperative  enterprises 
found  throughout  Great  Britain  during  Robert  Owen's 
period.  That  there  might  be  in  them  the  germs  of  a 
mighty  economic  mass  movement  of  the  future  the 
idealists  never  suspected ;  they  could  not  see  in  grind- 
ing flour  or  selling  groceries  a  road  to  the  social  mil- 
lennium. On  the  other  hand,  the  members  of  these 
small  working-class  societies  themselves  seemed  equally 
unconscious  of  any  social  mission. 

There  was  one  man,  however,  whose  vision  pene- 
trated clearly  into  the  distant  future. 

Dr.  William  King,  like  practically  all  of  the  social 


THE   FIRST   SPROUTINGS  I '5 

missionaries  of  his  time,  was  not  of  the  working  classes 
himself.  After  having  graduated  from  Oxford  and 
Cambridge,  he  studied  medicine  and  then  began  to 
practice  at  Brighton,  where  he  soon  rose  to  promi- 
nence within  his  profession  and  was  elected  a  member 
of  the  Royal  College  of  Physicians.  He  was  one  of 
the  founders  of  a  technical  school  in  Brighton,  where 
he  and  Ricardo,  the  famous  economist,  lectured  from 
the  same  platform.  Intensely  interested  in  social 
problems,  he  studied  industrial  conditions,  not  so  much 
at  firsthand  as  Robert  Owen,  but  as  a  theorist,  like 
the  scholar  he  was.  At  once  those  humble  flour  mill- 
ing and  store  societies  attracted  his  attention,  and  so 
impressed  was  he  by  their  potential  significance  that 
he  persuaded  the  students  of  the  school  he  had  founded 
to  organize  such  a  society  in  Brighton,  in  1827,  just 
when  Owen  was  in  the  midst  of  his  propaganda  for 
communist  colonies. 

In  the  following  year  Dr.  King  began  to  publish, 
at  his  private  expense,  a  series  of  essays,  in  periodical 
form,  on  cooperation,  wherein  he  expounded  his  con- 
ception of  the  means  by  which  the  working  classes  were 
to  emancipate  themselves  from  their  industrial  slavery. 
And,  in  marked  contrast  to  the  hundreds  of  other 
writers  on  the  same  general  subject  who  were  then 
expounding  their  views,  King  addressed  his  remarks 
to  the  working  classes  themselves  directly,  in  the  sec- 
ond person  plural. 

"  This  should  be  done,"  he  said,  in  effect,  "  to  gain 
that  end.     And  only  you  yourselves  can  do  it." 

There  is  no  evidence  that  the  working  classes  ever 
read  the  lectures  addressed  to  them  by  Dr.  King. 
Twenty-eight  numbers  of  the  Brighton  Cooperator 
were  issued,  and  then  their  author  and  publisher  sus- 
pended publication  in  despair.     Or  perhaps  he   felt 


1 6  consumers'  cooperation 

he  had  delivered  his  message.  Like  many  another 
prophet,  he  preached  in  the  wilderness,  and  though 
England  teemed  with  hundreds  of  intellectuals  keenly 
interested  in  solving  the  great  social  problems,  not  one 
took  the  least  notice  of  King's  essays.  Holyoake,  than 
whom  there  never  was  a  more  verbose  writer,  passes 
him  over  with  a  paragraph. 

Though  King's  writings  were  inspirational,  rather 
than  scientific,  in  him  the  modern  cooperative  move- 
ment found  its  first  theorist,  its  first  prophet.  So  clear 
was  his  insight  into  the  future  that  the  subsequent  de- 
velopment and  progress  of  the  cooperative  movement 
has  shown  little  deviation  from  the  path  he  marked 
out  for  it,  nearly  a  hundred  years  ago.  So  applicable 
are  the  principles  he  enunciated  and  the  arguments  he 
made  to  present-day  cooperation  that  a  summary  of 
his  program  is  worthy  of  presentation,  not  only  on  ac- 
count of  its  historical  value,  but  because  of  the  clear 
conception  it  gives  of  the  ideals  that  animate  the  more 
intelligent  leaders  of  the  modern  movement. 

Until  quite  recently  it  may  be  said  that  not  one 
Cooperator  had  ever  heard  of  King  or  his  Cooperator, 
except  through  the  one  paragraph  in  Holyoake's  remi- 
niscences. Then,  some  six  or  seven  years  ago,  Dr. 
Hans  Miiller,  secretary  of  the  International  Coopera- 
tive Alliance,  himself  a  scholar  and  perhaps  the  fore- 
most exponent  of  modern  cooperation,  while  engaged 
in  research  in  the  library  of  the  British  Museum  came 
across  a  file  of  the  old  Brighton  Cooperator.  The 
result  was  that  he  devoted  a  good  half  of  the  Inter- 
national Cooperative  Alliance  Yearbook  for  1913  to 
an  exposition  of  King's  writings. 

"  There  is  no  doubt,"  comments  Dr.  Miiller,  "  that 
King's  idea  of  cooperation  was  one  of  social  reform. 
King  does  not  regard  cooperation  merely  as  a  means 


THE    FIRST   SPROUTINGS  1 7 

of  imposing  limits  on  or  exterminating  the  middleman, 
or  augmenting  the  productive  power  of  labor  ...  he 
hopes  by  means  of  the  cooperative  society  to  transform 
the  structure  of  our  economic  life  as  a  whole,  and  thus 
liberate  labor  from  subjection  to  and  dependence  on 
capital.  It  is  obvious  from  the  point  of  view  adopted 
by  King  that  he  looks  upon  the  interest  of  capital  and 
labor  as  being  hostile  the  one  to  the  other,  though  this 
view  is  not  directly  expressed  in  words.  Without 
actually  mentioning  the  word  capitalism  it  is  plain  to 
him  that  if  the  lines  hitherto  followed  are  still  further 
pursued,  it  will  result  in  adding  ever-increasing  mem- 
bers to  the  proletariat.  He  considers  it  essential  to 
depart  from  the  economic  system  of  the  present  day, 
which  compels  the  impecunious  worker  to  agree  to 
work  for  an  employer  in  order  to  gain  bare  subsist- 
ence. King  considers  cooperation  the  means  to  be 
adopted  in  the  conquest  of  capitalism  and  its  wage 
system,  .  .  .  The  aim  of  co5peration  is  to  enable  the 
workman  to  work  for  himself  and  his  fellow  cooper- 
ators.  ...  A  means  to  this  end  is  the  erection  of 
stores  from  which  members  may  purchase  all  provi- 
sions and  other  necessaries.  Members  will  not,  how- 
ever, gain  any  immediate  advantage  by  so  doing,  but  it 
will  provide  a  means  for  the  building  up  of  a  collective 
capital,  which  they  will  at  no  very  distant  date  be  able 
to  use  in  employing  their  own  members.  .  .  .  Accord- 
ing to  King  the  main  idea  of  cooperation  is  the  acqui- 
sition of  property,  and  this  idea  on  his  part  separates 
him  distinctly  from  Owen,  He  stands  in  marked  con- 
trast to  the  latter.  Owen  regarded  a  community, 
which  is  a  kind  of  agricultural-industrial  and  educa- 
tional society,  as  the  only  form  of  cooperation  which 
would  meet  with  success  and  for  the  establishment  of 
which  a  large  capital  was  necessary.     King,  on  the 


i8  consumers'  cooperation 

other  hand,  wished  to  develop  cooperation  solely  by 
turning  to  account  the  power  and  means  which  the 
worker  already  possessed." 

Dr.  Miiller  then  quotes  King  as  follows: 

**  Cooperation  being  a  subject  quite  new  to  the 
working  classes,  it  is  natural  that  they  should  be  igno- 
rant of  it.  If  it  has  been  heard  of  by  them  at  all,  it 
has  been  in  such  a  way  as  to  make  it  appear  completely 
visionary.  It  has  always  been  connected  with  the  idea 
that  in  order  to  carry  it  into  practice,  large  sums  of 
money  are  absolutely  necessary,  (Obviously  a  refer- 
ence to  Owen's  schemes.)  The  smallest  sum  ever 
mentioned  as  sufficient  for  the  purpose  is  £20,000. 
From  this  the  advocates  have  gradually  risen  up  to  as 
high  as  a  million.  ...  A  man  wants  nothing  but  his 
wages  and  an  honest  companion  to  begin.  If  they  can 
find  a  third  to  join  them,  they  may  say  '  a  threefold 
cord  is  not  soon  broken.'  They  may  subscribe  weekly 
toward  a  common  fund,  they  may  market  for  each 
other,  they  may  buy  large  quantities  of  goods  at  once 
and  so  get  an  abatement  of  price  —  which  abatement 
they  may  throw  into  a  common  stock," 

Thus,  it  will  be  seen.  King  bases  his  philosophy  on 
the  power  of  the  workers  as  consumers. 

"  If  a  number  of  workmen  were  to  join  together," 
he  continues,  "  on  these  principles,  their  capital  would 
be  greater  and  they  might  do  great  things.  They 
might  have  a  store  of  their  own  where  they  might  deal 
in  anything  they  wanted.  Their  store  would  enter 
into  competition  with  other  stores  in  serving  the  pub- 
lic. As  the  business  increased,  the  profits  and  capital 
would  increase.  As  the  capital  increased  it  would  em- 
ploy the  members  of  the  society,  in  any  way  which 
might  be  deemed  most  advantageous.  If  there  was 
a  profitable  demand  in  the  public  for  any  particular 


THE    FIRST   SPROUTINGS  1 9 

commodity,  the  members  might  manufacture  it.  If 
the  profits  of  manufacture  were  not  high  enough  to 
make  it  worth  producing  them,  the  members  might 
easily  raise  their  own  food  by  hiring  or  purchasing 
land,  and  becoming,  part  of  them,  agriculturalists  in- 
stead of  manufacturers." 

Here  he  prophesies  what  was  not  realized  till  a 
generation  later :  that  the  consumers  cannot  only  man- 
ufacture for  themselves,  but  reach  back  to  the  original 
source  of  all  production  —  land.  But  over  and  over 
again  he  emphasizes  beginning  from  the  distributive 
end,  as  follows : 

"  The  working  class  should  begin  by  having  shops 
(stores)  of  their  own.  These  shops  should  belong  to 
a  number  who  should  form  themselves  into  a  society 
for  the  purpose.  ,  .  .  They  should  deal  as  much  as 
possible  with  their  own  shops  —  by  which  each  society 
would  receive  the  profit  upon  the  run  of  the  shops, 
which  now  goes  to  the  shops  in  general  (private 
stores),  by  which  profit,  by  which  alone,  all  the  rich 
shopkeepers  in  the  world  grow  rich  and  make  their 
fortunes.  We  say  it  is  this  profit  alone  which  main- 
tains the  splendor  of  the  merchants  and  companies  of 
the  world.  The  London  merchants,  the  Liverpool 
merchants,  the  Bank  of  England,  all  make  their  for- 
tunes out  of  this  profit. 

"Then,  if  this  be  so,  the  working  classes  have  the 
strongest  possible  motives  for  opening  shops  for  them- 
selves. The  sum  of  money  which  the  working  classes 
spend  each  year  is  enormous.  The  profit  on  this  sum 
would  of  itself  be  sufficient  to  establish  many  manu- 
factories. It  is  not  the  want  of  power,  but  their  want 
of  knowledge,  which  prevents  their  making  a  begin- 
ning." 

"  As  is  clearly  obvious  from  King's  expositions," 


20  CONSUMERS     COOPERATION 

comments  Dr.  Miiller,  "  he  recognizes  that  the  power 
of  the  working  classes  lies  in  their  capacity  as  con- 
sumers. If  the  working  classes  were  to  organize  them- 
selves cooperatively,  and  purchase  all  their  goods  from 
their  own  shops,  they  would  thus  accumulate,  year  by 
year,  a  considerable  sum  of  money  which  would  be  of 
much  economic  importance  and  would  enable  them  to 
build  their  own  factories,  acquire  landed  property,  and 
provide  work  for  themselves.  This  recognition  of  the 
economic  powers  possessed  by  the  workers  enabled 
King  from  the  outset  to  reject  the  philanthropic  social- 
ism of  Owen.  The  latter  made  constant  appeals  to 
the  prominent  and  wealthy  members  of  society,  re- 
questing them  to  furnish  means  for  social  experiments 
for  the  solution  of  social  problems,  while  King,  on 
the  contrary,  makes  his  appeal  solely  to  the  working 
classes.  He  is  convinced  of  the  fact  that  they  possess 
the  necessary  power  and  capability  to  acquire  the 
requisite  means  for  production;  what  they  lack  is  in- 
sight and  knowledge.  The  consciousness  of  their 
power  and  capability,  rightly  made  use  of,  would 
emancipate  them  from  the  capitalist  class." 

The  above  quotations,  brief  as  they  are,  fairly  well 
indicate  King's  plan.  His  difference  of  opinion  from 
the  Owenites  cannot  be  too  much  emphasized.  Both 
did  agree  in  that  they  believed  that  the  tools  of  indus- 
try should  be  collective  property.  But  the  Owenites 
were  essentially  revolutionists,  in  that  they  wanted 
this  transition  to  be  effected  at  once.  They  differed 
only  from  the  majority  of  present-day  political  So- 
cialists in  that  they  would  utilize  the  money  of  rich 
people  as  a  means,  for  which  the  latter  have  substi- 
tuted legislative  action,  political  power. 

While  King  was  an  evolutionist,  realizing  that  this 
great  change  could  only  be  accomplished  gradually. 


THE   FIRST   SPROUTINGS  21 

developing  simultaneously  with  the  growing  knowl- 
edge and  training  of  the  people.  Furthermore,  the 
Owenites,  again  like  many  Socialists  of  to-day,  and 
like  the  Syndicalists,  held  that  the  power  of  control 
should  be  scattered  about  among  many  separate,  or 
trade,  groups,  each  in  possession  of  the  tools  pertain- 
ing to  its  special  vocation.  Whereas  King  conceived 
of  the  people  as  one  broad  democracy,  wielding  their 
power  in  common,  to  which  each  individual  woricer 
should  be  equally  subsenient 


CHAPTER  III 

THE  TWENTY-EIGHT    WEAVERS   OF   ROCHDALE 

That  magnificent  idealism  which  swept  over  England 
during  the  first  twenty-five  or  thirty  years  of  last 
century  and  which,  though  it  included  a  thousand 
varying  ideas  and  theories  for  the  improvement  of  the 
social  system,  went  under  the  name  of  cooperation, 
seemed  to  recede  and  almost  disappear  during  the  early 
thirties.  To  be  sure,  Owen's  voice  remained  heard 
during  the  whole  first  half  of  the  century,  but  his 
upper-class  audience  dwindled  almost  to  nothing,  and 
the  working  classes  as  a  whole  knew  nothing  of  him. 

The  depression  which  set  in  may  in  large  part  be 
ascribed  to  the  wholesale  failures  of  the  schemes  with 
which  Owen  and  his  followers  were  connected.  Some 
of  the  leaders  of  the  cooperative-store  organizations 
had,  indeed,  been  attracted  to  his  propaganda,  with 
the  result  that  they,  too,  had  become  imbued  with  his 
big-scale  conceptions  and,  in  trying  to  adapt  their 
small  experiments  to  Owenite  theories,  had  caused 
them  to  fail. 

Among  the  stores  as  a  whole  there  had  also  been  a 
great  number  of  failures.  But  it  is  inherent  in  the 
nature  of  Consumers'  Cooperation  that  its  initial  at- 
tempts do  fail.  Apparently  the  majority  must  fail 
until  federation  strengthens  the  units  and  develops 
methods  of  practice. 

At  about  this  time,  too,  the  pressure  on  the  masses, 
augmented  by  the  pernicious  com  laws,  was  becoming 
so  unbearable  that  they  were  much  more  in  the  mood 

22 


THE   TWENTY-EIGHT    WEAVERS   OF   ROCHDALE       23 

for  violent  revolution  than  for  the  evolutionary  meth- 
ods of  Consumers'  Cooperation.  The  Bolshevism  of 
that  time  was  in  the  air.  During  this  period  occurred 
the  mob  demonstrations  in  favor  of  the  People's  Char- 
ter, sometimes  taking  almost  the  character  of  armed 
uprisings.  Finally,  after  the  corn  laws  had  been  re- 
pealed, Chartism  died  down  and  once  again,  after  ten 
years  or  more,  the  people  were  cool  enough  to  con- 
sider cooperation. 

But  by  this  time  they  had  little  to  turn  to  in  this 
direction.  The  voices  of  the  Utopians,  the  cranks  of 
their  day,  were  stilled.  And  though  Dr.  King  was 
still  alive,  nobody  outside  the  medical  profession  re- 
membered either  him  or  his  preachings. 

It  was  for  this  reason,  rather  than  because  of  any 
new  principles  they  introduced,  that  the  Rochdale  Pio- 
neers were  then,  or  have  since  been,  regarded  as  the 
pioneers  of  the  cooperative  movement.  The  story  of 
their  organization  is  rather  picturesque  and  has  been 
made  much  of;  in  fact,  it  is  usually  the  sum  total  of 
the  average  American's  knowledge  of  cooperation. 
However,  as  the  Rochdale  Society  has  been  commonly 
regarded  as  a  type  of  a  truly  cooperative  society,  it  may 
be  well  to  review  the  origin  of  the  organization  anew. 

In  the  early  winter  of  1843  a  number  of  weavers  in 
the  town  of  Rochdale,  in  the  north  of  England,  came 
together  to  discuss  ways  and  means  to  bettering  their 
condition.  There  had  recently  been  a  strike  in  the 
flannel  mills  of  the  town  followed  by  a  lockout  and 
general  unemployment.  Labor  organization  as  a 
means  of  bettering  the  situation  did  not  inspire  them 
with  much  hope,  after  the  experience  they  had  gone 
through.  There  was  little  chance  of  raising  wages 
then.  But  why  not  try  to  accomplish  what  would 
amount  to  the  same  thing  through  other  means;  raise 


24  consumers'  cooperation 

their  wages  by  lessening  the  cost  of  living  through  a 
cooperative  store? 

There  had  been  a  cooperative  store  in  the  town  some 
years  before,  and  it  had  failed.  Nevertheless,  they 
decided  to  try  again.  Just  previously,  Jacob  Hoi- 
yoake,  an  Owenite  disciple,  who,  however,  dififered 
from  his  earlier  colleagues  and  the  master  in  that  he 
attached  some  importance  to  the  cooperative  store,  had 
delivered  a  lecture  in  the  town  and  had  urged  them 
to  make  a  beginning. 

The  weavers  agitated  the  idea  among  themselves 
until  they  had  increased  their  group  to  twenty-eight, 
each  of  whom  agreed  to  subscribe  one  pound  toward 
the  initial  capital  required  for  the  purpose  of  opening 
a  grocery  store.  This  money  was  paid  up  in  weekly 
installments  of  a  few  pennies,  but  finally  the  twenty- 
eight  pounds  had  been  accumulated  and  the  now  fa- 
mous store  was  opened  in  a  back  street.  Toad  Lane, 
the  members  taking  turns  as  salesmen  during  the  eve- 
ning hours  the  store  was  kept  open. 

Hundreds  of  just  such  stores  had  been  opened  be- 
fore by  just  such  groups  of  workingmen.  There  was, 
however,  a  special  feature  about  the  business  system 
on  which  the  little  enterprise  was  founded,  inscribed 
in  the  by-laws  of  the  society,  which  has  served  to  dis- 
tinguish it  in  the  history  of  the  cooperative  movement. 
As  is  known  now,  this  feature  had  been  practiced  by 
earlier  societies,  but  the  Rochdale  weavers  made  it 
widely  known  through  their  success  and  so  made  the 
name  of  their  town  a  household  word  in  every  civilized 
country  of  Europe. 

The  business  plan  on  which  the  early  societies  had 
been  operated  had  been  various.  In  all  of  them  the 
individual  members  subscribed  certain  fixed  sums, 
usually    one   pound,    toward    the    necessary    capital. 


THE   TWENTY-EIGHT    WEAVERS    OF    ROCHDALE       2^ 

Some 'Stores, 'among  whose  members  idealists  predomi- 
nated, sold  the  goods  at  market  prices  and  allowed  the 
profits  to  accumulate  with  the  store's  capital.  Such 
societies  rarely  developed,  for  the  reason  that  the 
majority  of  people  are  not  idealists  and  seek  definite 
benefits,  caring  little  for  future  promises.  This  was 
King's  plan,  pure  and  simple.  It  had  to  be  slightly 
modified  before  it  would  work. 

Other  stores  returned  the  profits  to  the  shareholding 
members  as  dividends  on  shares,  thus  differing  from 
ordinary  joint-stock  companies  only  in  that  the  shares 
were  scattered  among  a  greater  number  of  people. 
Other  stores  sold  at  cost  price,  or  slightly  above. 
These  latter,  naturally,  had  not  within  them  the  ele- 
ment of  growth,  and  the  slightest  miscalculation  easily 
resulted  in  a  fatal  loss. 

The  Rochdale  cooperators  formulated  a  plan  which 
has  ever  since  borne  the  name  of  their  community;  a 
method  which  was,  in  effect,  a  compromise  between  the 
idealism  of  King's  proposal  and  the  inherent  selfishness 
of  average  human  nature.  . 

The  peculiar  clause  in  their  by-laws  provided  that 
goods  in  their  store  were  to  be  sold  at  regular  market 
prices,  such  as  prevailed  in  the  private  stores.  At 
the  end  of  each  quarter  the  profits,  after  all  expenses 
had  been  paid,  and  after  a  substantial  appropriation 
had  been  made  to  a  reserve  fund,  was  given  back  to 
the  purchasing  members,  to  each  in  proportion  to  the 
amount  of  his  purchases.  Capital,  representing  the 
shareholdings  of  the  members,  received  only  a  fixed, 
minimum  rate  of  interest,  its  rental,  as  it  were,  and 
was  considered  as  an  expense.  Each  member,  man 
or  woman,  had  one  vote  in  directing  the  affairs  of  the 
society,  regardless  of  the  number  of  shares  held,  which 
was,  however,  usually  only  one. 


26  consumers'  cooperation 

Such,  in  brief,  is  the  Rochdale  plan,  with  such  minor 
variations  as  paying  half  rebates  to  purchasers  not 
members,  allowing,  or  not  allowing,  employees  to 
become  candidates  for  office,  etc.  The  appropriation 
of  a  fixed  proportion  of  the  profits  to  education,  or 
propaganda,  was  another  Rochdale  feature  considered 
important  in  those  days,  before  this  function  was 
largely  taken  over  by  a  federative  central  body. 

The  Rochdale  system  of  returning  the  profits  of  an 
enterprise  to  the  purchasers  in  the  form  of  rebates  has 
generally  been  considered  a  revolutionary  innovation, 
though  it  must  be  clear  that  not  returning  the  profits 
to  the  purchasing  members  would  be  still  more  revolu- 
tionary, provided  they  were  retained  as  collective 
capital,  in  conformity  to  King's  ideas.  It  will  also 
be  clear  that  had  it  been  practicable  to  follow  the  latter 
course,  cooperative  stores  would  have  developed  much 
more  rapidly  in  that  the  profits  would  have  augmented 
their  capital.  Thus  the  Rochdale  plan  is  actually  only 
a  modification  of  the  principle  itself. 

Yet  even  as  it  is  practiced,  the  Rochdale  system 
abolisTies  private  profit  from  industry,  so  far  as  it 
reaches.  In  the  ordinary  commercial  sense  "  profit  " 
is  that  margin  between  buying  and  selling  prices  which 
the  private  merchant,  or  manufacturer,  puts  into  his 
pocket.  As  King  pointed  out,  it  is  from  this  source 
that  the  great  private  fortunes  of  commerce  are  de- 
rived. It  is  to  this  tax,  levied  by  capitalism  on  the 
consuming  public,  that  the  Socialists  attribute  all  the 
evils  of  capitalist  industry.  On  this  point  the  coopera- 
tors  agree  with  the  Socialists.  Therefore,  since  this 
margin  is  derived  from  the  consumers,  they  either 
return  it  to  them  or  place  it  to  their  credit  as  collective 
capital,  thereby  abolishing  private  profit  completely. 
In  fact,  it  is  no  longer  profit. 


THE  TWENTY-EIGHT    WEAVERS   OF   ROCHDALE       2/ 

Is  it  Just,  some  may  ask,  that  his  remuneration  for 
services  rendered  should  be  taken  from  the  merchant  or 
the  manufacturer? 

But  cooperation  does  not  deprive  the  shopkeeper  or 
the  manufacturer,  or  what  corresponds  to  these  func- 
tionaries under  the  cooperative  system,  of  remunera- 
tion for  services  rendered.  Under  the  profit  system 
the  merchant  or  the  manufacturer  has  largely  the 
power  to  fix  his  own  remuneration,  this  power  being 
limited  only  by  competition  or  the  capacity  of  the  pub- 
lic to  pay  his  prices.  Never  does  profit  bear  any  rela- 
tion to  cost.  This  power  of  fixing  his  own  remunera- 
tion cooperation  would  take  out  of  the  hands  of  the 
merchant  and  place  in  the  hands  of  the  people,  giving 
him,  instead,  a  fixed  salary,  or  wage,  approximately  in 
proportion  to  the  value  of  his  services.  Thus  the  in- 
dependent shopkeeper,  or  merchant,  is  transposed  into 
the  salaried  store  manager;  the  private  manufacturer 
into  the  paid  factory  superintendent.  Universally  ap- 
plied, this  would  mean  that  every  one  of  us  should 
become  the  paid  servant  of  his  fellows. 


CHAPTER  IV 

FEDERATION 

The  Rochdale  store,  which  was  a  successful  enterprise 
from  the  beginning,  marks  the  rise  of  what  some 
writers  call  the  Second  Cooperative  Movement, 
Owen's  and  kindred  experiments  being  considered  the 
first,  though  as  a  matter  of  fact  there  had  not  yet  been 
any  pronounced  development  of  the  consumers'  organ- 
izations. That  the  success  of  the  Rochdale  store  was 
due  to  the  new  system  of  returning  profits  to  pur- 
chasers is  not  entirely  true,  as  even  societies  beginning 
on  this  basis  have  a  habit  of  failing  before  a  general 
movement  is  established.  Simple  weavers  though  they 
were,  there  seem  to  have  been  among  the  original 
members  a  number  of  men  of  exceptionally  good 
judgment  and  what  is  commonly  called  business  abil- 
ity, for  Rochdale  was  to  furnish  the  main  guidance 
in  a  much  bigger  enterprise  whose  establishment  we 
are  coming  to  presently. 

The  "  dividends  on  purchase  "  system,  however,  was 
largely  given  credit  for  Rochdale's  success.  Its  fame 
began  spreading,  first  all  over  Great  Britain,  then, 
some  years  later,  all  over  the  civilized  world,  even  to 
this  country.  One  by  one  all  the  existing  coopera- 
tive-store societies  in  England  and  Scotland  adopted 
the  Rochdale  plan,  while  new  societies  founded  on 
this  basis  began  appearing  in  large  numbers,  especially 
in  the  industrial  districts  in  Lancastershire  and  York- 
shire, in  the  north  of  England,  and  in  Scotland. 
Here,  for  nearly  a  generation,  the  consumers'  move- 

28 


FEDERATION  29 

ment  was  centered.  Nor  must  this  restriction  to  a 
limited  area  be  forgotten  in  comparing  the  progress 
of  cooperation  in  Great  Britain  with  its  slow  develop- 
ment in  this  country.  These  early  stores  were  close  to- 
gether, within  walking  distance  of  each  other,  so  to 
speak.  The  leaders,  the  members  of  the  local  manag- 
ing committees,  could  come  in  frequent  contact  with 
each  other  and  compare  notes  regarding  methods  of 
management  and  propaganda  and,  quite  as  important, 
stimulate  each  other's  enthusiasm.  Many  a  first  ef- 
fort has  died  through  isolation. 

The  Rochdale  Pioneers  (the  Rochdale  Society  of 
Equitable  Pioneers)  had  begun  business  in  1844,  with 
a  capital  of  very  little  over  a  hundred  dollars,  and 
during  the  next  year  it  did  a  business  of  about  three 
thousand  five  hundred  dollars.  Ten  years  later  its 
original  membership  of  twenty-eight  had  expanded 
to  nearly  a  thousand  and  its  yearly  business  was 
amounting  to  considerably  over  one  hundred  thousand 
dollars.  And  in  1859,  when  new  developments  in 
the  movement  were  about  to  take  place,  the  member- 
ship was  nearly  three  thousand  and  the  yearly  trade 
over  half  a  million  dollars. 

But  though  many  of  the  societies  which  were 
founded  through  the  stimulus  given  them  by  the  Roch- 
dale people  failed,  there  were  many  which  succeeded 
and,  toward  the  late  fifties,  were  showing  quite  as 
vigorous  a  development  as  Rochdale.  By  that  time 
the  local  cooperative  store  had  passed  the  experimental 
stage ;  some  hundreds  of  prospering  enterprises  had 
proven  beyond  a  doubt  that  workingmen  could  handle 
the  distribution  of  their  own  necessities  quite  as  effi- 
ciently as  private  dealers  could  do  it  for  them,  and 
much  more  economically. 

The  cooperators  had  learned  their  first  lesson  and 


30  CONSUMERS     COOPERATION 

knew  it  well.  But,  as  must  have  been  obvious  to  the 
least  ambitious  of  them,  there  was  no  reason  why  they 
should  stop  there.  The  whole  world  of  commerce  and 
industry  lay  before  them,  and  beyond  that  lay  the 
land  for  whose  possession  all  the  early  organizers  had 
yearned. 

By  combining  their  individual  purchasing  powers, 
the  Cooperators  had  succeeded  in  reducing  economic 
pressure  to  an  appreciable  degree.  It  required  no  deep 
insight  on  the  part  of  the  members  of  the  local  socie- 
ties to  realize  that  this  process  of  reduction  could  be 
carried  a  step  further.  As  individuals  had  combined, 
so  local  societies  could  combine  and  centralize  a  really 
enormous  purchasing  power.  The  stores  saved  their 
members  the  profits  of  the  shopkeepers ;  the  super-co- 
operative society,  the  federation,  would  save  them  the 
profits  of  the  wholesale  dealers,  the  commission  mer- 
chants, the  jobbers,  for  it  could  deal  directly  with 
manufacturers  and  agricultural  producers. 

Already  in  the  early  days  the  idea  of  a  centralized 
purchasing  power,  a  central  purchasing  agency^  had 
been  advocated  by  some  of  the  leaders.  The  Halifax 
Society,  Dr.  King's  creation,  actually  succeeded  in 
getting  twenty  other  societies  to  join  it  in  such  an 
attempt.  Some  capital  had  been  raised,  a  warehouse 
had  been  opened  in  Liverpool.  It  existed  for  two 
years,  and  then  disappeared.  The  time  had  not  yet 
come. 

Now,  in  the  late  fifties  and  the  early  sixties  the  agita- 
tion for  what  was  termed  a  "  wholesale  society  "  was 
renewed.  But  now  there  were  behind  the  agitation 
men  who  had  had  experience  in  commercial  enterprise, 
while  the  local  cooperative  societies  numbered  around 
three  hundred. 

Back  in   1852  the   Rochdale   Society  had,  at  the 


FEDERATION  3 1 

suggestion  of  other  societies,  undertaken  to  include  the 
purchases  of  its  neighbors  with  its  own  by  opening  a 
wholesale  department,  but  this  proved  a  failure.  At 
this  time  cooperative  spirit  was  still  so  undeveloped 
that  the  members  of  the  other  societies  could  still  not 
conceive  of  an  enterprise  being  carried  on  without  the 
stimulus  of  "  profit,"  and  they  suspected  Rochdale 
of  ulterior  motives.  On  the  other  hand,  the  members 
of  the  Rochdale  Society  could  not  yet  see  the  advantage 
of  carrying  on  a  business  for  outsiders  without  profit. 
The  venture  failed  then,  but  at  a  later  date  Rochdale 
and  a  number  of  the  neighboring  societies  effected  a 
small  local  federation  for  the  purpose  of  grinding  their 
flour  in  common. 

In  i860,  this  time  at  the  initiation  of  several  of  the 
Rochdale  leaders,  conferences  were  held  by  representa- 
tives from  the  various  local  societies  about  Manchester 
to  discuss  federation.  The  first  obstacle  that  presented 
itself  before  them  was  the  law,  which  seemed  to  take 
the  point  of  view  that  workingmen  should  not  be 
intrusted  too  far  with  the  management  of  their  own 
affairs.  There  was  a  statute  which  forbade  one  co- 
operative society  from  holding  shares  in  another  and 
limited  the  holding  of  landed  property  to  one  acre. 

The  first  business  undertaken  by  the  committee 
appointed  by  these  conferences  was  to  have  this  statute 
removed  from  the  books.  The  agitation  was  taken 
up  through  members  of  Parliament,  the  local  societies 
subscribing  varying  sums  of  money  for  the  expenses. 
In  these  efforts  the  Cooperators  were  supported  by 
Richard  Cobden,  the  famous  apostle  of  free  trade 
and  then  representing  the  Rochdale  constituency  in 
Parliament.  Other  representatives  of  northern  con- 
stituencies also  gave  their  support.  But  over  a  year 
passed  before  they  succeeded. 


32  CONSUMERS     COOPERATION 

The  member  who  presented  the  bill  before  Parlia- 
ment for  its  second  reading  spoke  of  some  hundreds 
of  societies  in  existence,  "  doing  a  business  which  in 
the  course  of  last  year  amounted  to  the  extraordinary 
and  almost  incredible  sum  of  $7,500,000,  The  men 
responsible  for  this  bill,"  he  added,  "  are  not  embarked 
in  a  pleasure  boat,  but  are  pulling  for  their  lives  in 
a  mere  skiff  and  deserve  to  be  protected  from  the 
surging  billows  on  every  side." 

But  eventually  the  bill  annulling  the  objectionable 
law  was  passed,  without  one  voice  being  raised  against 
it,  either  in  the  Commons  or  the  House  of  Lords.  The 
societies  were  now  able  to  federate  and  carry  on  a 
business,  with  limited  liability,  on  an  equal  basis  with 
private  corporations.  Now  the  move  toward  central- 
ized buying  was  pushed  vigorously. 

In  1863  the  "  North  of  England  Cooperative  Whole- 
sale Industrial  and  Provident  Society  "  was  founded 
and,  not  long  afterward,  it  opened  a  modest  office.  At 
first  it  was  intended  that  this  central  purchasing  agency 
should  supply  its  constituencies  of  local  societies  only 
with  a  limited  line  of  groceries,  the  expenses  to  be 
paid  out  of  a  commission  charge.  But  this  was  soon 
changed  to  the  same  system  practiced  by  the  local  so- 
cieties, whereby  goods  were  sold  at  market  prices  and 
the  surplus  was  returned  in  proportion  to  purchases,  or 
"  to  increase  the  capital  of  the  society."  Eventually 
the  practice  became  to  devote  a  substantial  part  of  the 
surplus  to  reserve  funds  and  the  working  capital  and 
to  return  the  rest  to  members.  The  business  was  man- 
aged by  a  special  committee,  or  board  of  directors, 
elected  by  the  quarterly  meetings  of  the  delegates  from 
the  constituent  societies. 

The  first  half  yearly  report,  issued  in  1864,  showed  a 
membership  of  fifty-four  societies,  representing  about 


FEDERATION  33 

eighteen  thousand  Cooperators.  The  weekly  busi- 
ness of  these  members  amounted  to  about  forty-two 
thousand  dollars  in  the  aggregate,  yet  for  a  period 
the  sales  of  the  Wholesale  Society  amounted  to 
only  about  four  thousand  dollars  a  week.  This  meant 
that  the  societies  which  had  actually  joined  the  Whole- 
sale and  had  subscribed  to  its  capital  stock  were  giv- 
ing it  only  about  ten  per  cent,  of  their  trade. 

An  inquiry  into  this  situation  revealed  one  of  the 
first  obstacles  which  the  Wholesale  had  to  contend 
with.  The  local  managers,  the  socialized  shopkeepers, 
decidedly  objected  to  having  the  functions  of  buying 
taken  away  from  them.  It  reduced  them  from  re- 
sponsible positions  to  mere  clerks.  Some  were  able 
to  influence  their  committees  against  patronizing  the 
central  institution,  though  the  members  had  voted  in 
favor  of  it.  But  this  obstacle,  like  many  others,  of 
which  mere  prejudice  was  not  the  least,  was  gradually 
overcome.  At  the  end  of  the  second  six  months  a 
rebate  of  one  and  a  half  pence  on  the  pound  was  de- 
clared, and  at  the  end  of  the  third  six  months  this 
was  doubled.  In  1865,  a  little  over  a  year  after  be- 
ginning business,  the  office  of  the  Wholesale  was 
obliged  to  move  to  more  commodious  quarters.  By 
1866  over  two  hundred  societies  had  joined. 

The  establishment  of  the  Cooperative  Wholesale  So- 
ciety, to  which  its  first  long  name  has  since  been  re- 
duced, marked  a  very  important  turning  in  the  prog- 
ress, not  only  of  English  cooperation,  but,  as  will 
appear  later,  of  the  whole  world  movement,  already 
begun  in  many  of  the  Continental  countries  at  that 
time.  As  was  obvious  in  the  beginning,  it  was  not  of 
marked  benefit  to  the  larger  societies,  which  were  al- 
ready able  to  buy  in  big  quantities  and  deal  independ- 
ently with  manufacturers  and  agricultural  producers, 


L 


34  CONSUMERS     COOPERATION 

but  the  majority  of  them  joined  through  the  en- 
thusiasm of  their  leading  members.  It  was  to  the 
smaller  units  of  the  movement  that  the  Wholesale 
came,  often  as  a  saving  institution.  First  of  all,  it 
solved  the  discouraging  problem  of  buying  on  the 
wholesale  market,  a  difficulty  especially  terrifying  to 
amateurs.  It  saved  also  the  expense  of  buying:  not 
only  the  higher  salaries  which  must  be  paid  men  with 
such  ability,  but  the  time  which  they  must  devote  to 
this  function.  It  was  far  better  able  to  insure  qual- 
ity and  purity,  since  it  could  afford  to  employ  men 
who  were  experts  in  judging.  Its  growing  purchasing 
power  could  enable  it  to  obtain  better  bargains;  this, 
of  course,  was  one  of  the  chief  arguments  in  its 
favor.  It  saved  the  stores  the  profits  of  the  middle- 
men. Finally,  it  encouraged  the  formation  of  new 
societies,  thereby  providing  a  stimulus  for  the  further 
expansion  of  the  movement,  for  it  eliminated  many  of 
the  important  causes  of  failure.  Bad  business  man- 
agement is  undoubtedly  the  chief  cause  of  failures,  and 
this  again  resolves  itself  into  the  inability  of  inexperi- 
enced persons  to  buy  as  cheaply  as  experienced  trades- 
men, with  whom  they  must  compete.  Disloyalty,  an- 
other fatal  disease  to  young  societies,  is  itself  only  a 
result  of  bad  management,  since  poor  quality  of  goods 
at  prices  higher  than  elsewhere  discourages  enthusiasm 
quicker  than  any  other  cause.  Under  the  wing  of 
the  big  Wholesale,  the  newly  hatched  societies  had 
not  these  initial  difficulties  to  fear;  they  began  their 
careers  full-fledged,  as  it  were,  enjoying  all  the  ad- 
vantages which  the  older  societies  had  only  gained 
from  a  long  and  grueling  experience.  Added  to  this, 
there  would  come  occasions  when  the  Wholesale  could 
offer  financial  assistance  to  local  societies  up  against  a 
critical  situation. 


FEDERATION  35 

And,  indeed,  from  now  on  began  the  steady  increase 
of  the  consumers'  cooperative  movement  in  Great 
Britain.  This  growth  which  it  encouraged  reacted  on 
the  Wholesale  itself,  which  rapidly  expanded.  At  the 
end  of  the  first  five  years,  in  1868,  nearly  6o,(X)o 
consumers  were  affiliated  with  it,  through  their  local 
societies,  while  the  sales  for  the  year  amounted  to  con- 
siderably over  $1,600,000,  as  compared  to  $259,000, 
the  sales  during  the  first  year.  At  the  end  of  ten 
years,  in  1873,  the  affiliated  members  numbered  134,- 
276;  while  the  sales  for  the  year  were  up  to  nearly 
$6,000,000,  on  which  the  surplus  savings  amounted  to 
over  $55,000. 

In  1872  a  banking  department  was  added  to  this 
central  purchasing  agency,  which  was  to  be  an  im- 
portant factor  in  a  new  development  imminent  at 
this  time.  Post-office  savings  banks  were  at  this  time 
unknown  and  local-store  members  were  in  the  habit 
of  depositing  their  savings  with  the  stores.  These 
savings  were  centralized  and  furnished  the  movement 
with  a  tremendous  capital. 

Meanwhile,  in  1868,  the  Scottish  cooperative  stores, 
observing  the  success  of  the  English  federation,  in- 
vited the  latter  to  establish  a  branch  in  Scotland,  but 
the  management  committee  of  the  English  Wholesale 
was  of  the  opinion  that  this  would  be  spreading  over 
too  wide  a  territory  and  advised  the  Scots  to  establish  a 
Wholesale  of  their  own.  This  they  immediately  did, 
with  the  active  assistance  and  guidance  of  the  Eng- 
lish. 

This  second  British  Wholesale  Society,  having  a 
smaller  territory  to  cover,  has  never  equaled  the  Eng- 
lish institution  in  size,  but  in  proportion  its  develop- 
ment and  progress  was  quite  as  marked.  Later  these 
two  central  institutions,  the  one  in  Manchester,  the 


36  consumers'  cooperation 

other  in  Glasgow,  were  to  form  a  partnership  in  spe- 
cial enterprises,  as  when  they  jointly  acquired  tea 
estates  in  Ceylon  for  the  production  of  tea  under  their 
own  control.  But  these  joint  enterprises  were  only 
those  of  such  a  nature  as  could  afford  economy  in 
concentration. 

And  here,  at  the  end  of  the  first  nine  or  ten  years, 
just  before  they  embarked  on  another  very  important 
development  in  the  cooperative  movement,  we  leave 
these  two  democratic  institutions  while  we  consider, 
briefly,  a  second  form  of  federation  which  had  al- 
ready been  effected  among  all  the  societies  of  Great 
Britain. 

As  already  noted,  a  wholesale  society  has  one  very 
specific  function  to  perform  for  its  constituent  mem- 
bers: to  supply  them  with  merchandise.  It  is  purely 
a  business  union,  in  the  hands  of  men  who  have  a 
certain  limited  work  to  perform. 

Yet  there  are  other  very  important  aspects  to  co- 
operation other  than  the  commercial.  Quite  as  im- 
portant, if  the  benefits  were  to  increase,  was  bringing 
more  members  into  the  movement,  whether  into 
already  existing  societies,  or  as  new  societies.  This 
could  best  be  accomplished  through  organized  propa- 
ganda. Publicity,  we  might  call  it,  corresponding  to 
the  advertising  of  private  industry. 

In  the  early  stages  each  member  possessed  of  the 
cooperative  enthusiasm  naturally  assisted  in  this  work, 
speaking  before  small  audiences  of  his  fellows,  or  "  go- 
ing after  them  "  individually.  But  it  is  not  every  per- 
son, no  matter  how  sincere,  who  has  the  power  of 
presentation  and  persuasion.  So  this  work  was  grad- 
ually relegated  largely  to  specialists:  orators  and  lec- 
turers. Then,  too,  the  printed  word  must  be  brought 
into  use;  leaflets,  pamphlets,  books,  periodical's,  must 


FEDERATION  37 

be  published,  to  spread  a  knowledge  of  cooperation  and 
■what  it  could  do  for  the  people.  Small  societies  could 
not  undertake  this  work  very  effectively,  so  a  number 
would  combine,  perhaps  on  speakers  and  printed  litera- 
ture, at  first. 

Next,  there  was  the  question  of  formulating  stand- 
ard rules  and  modes  of  procedure,  with  which  new  so- 
cieties might  be  guided  to  success.  Rochdale,  as  an 
illustration  of  this  need,  was  for  years  flooded  by 
letters  of  inquiry  regarding  such  matters,  some  of  them 
hard  to  determine  because  they  had  not  yet  been 
formulated.  Here,  again,  the  leaders  of  various  so- 
cieties came  together  to  compare  experiences. 

So  it  came  about  that  another  federation  was  grad- 
ually formed,  quite  aside  from  the  business  federation. 
True,  one  federation  might  accomplish  both  func- 
tions, propaganda  and  business,  and  this  is  actually 
done  at  the  present  time  in  several  countries,  but  ex- 
perience has  proved  that  a  separate  organization  for 
each  gives  the  movement  more  elasticity. 

The  desire  to  exchange  experiences  had  led  to  a 
number  of  conferences  in  the  north  of  England. 
Gradually  these  conferences  had  become  more  regular, 
formal,  and  expanded  into  district  conventions.  In 
185 1  there  was  a  general  convention  of  the  Yorkshire 
and  Lancastershire  societies,  held  in  Manchester,  at 
which  a  committee  was  elected  to  prepare  model 
rules  for  new  cooperative  societies.  Nine  years  later 
these  same  societies  organized  a  permanent  Confer- 
ence Association.  Finally,  in  1868,  a  national  con- 
ference was  held  in  London,  to  which  all  the  societies 
in  Great  Britain  were  invited  to  send  delegates.  At 
this  national  convention  a  committee  was  elected,  which 
made  arrangements  for  the  first  national  cooperative 
congress,  which  was,  accordingly,  held  next  year,  1869. 


38  consumers'  cooperation 

Since  then  the  general  British  movement  has  held  regu- 
lar yearly  congresses,  each  in  a  different  locality. 

From  the  first  congress  sprang  an  "  executive 
board,"  to  carry  out  the  orders  of  the  congress  dur- 
ing the  year,  being  just  what  its  name  indicated. 
Within  a  short  time  this  was  expanded  to  a  permanent 
Central  Cooperative  Board,  in  which  the  movement 
was  represented  in  five  sections,  or  districts.  This  or- 
ganization later  developed  into  the  present  British 
Cooperative  Union. 

The  Cooperative  Union  is,  first  of  all,  the  educa- 
tional body  of  the  British  Cooperative  Movement. 
Each  yearly  congress  decides  what  character  this  edu- 
cation, or  propaganda,  shall  assume ;  what  constitutes 
true  cooperative  principle  and  method.  Some  have 
referred  to  these  congresses  as  "  the  British  Coopera- 
tive Parliament,"  but  its  character  comes  somewhat 
short  of  this.  In  the  early  years  it  did,  indeed,  at- 
tempt to  dictate  to  the  business  federation,  but  its 
impotency  as  a  legislative  body  for  the  movement  was 
quickly  demonstrated,  as  we  shall  have  occasion  to 
show  later. 

Aside  from  carrying  on  a  country-wide  propaganda 
through  lectures,  pamphlets,  books,  and  other  pub- 
lications, the  Union  acts  as  an  advisory  bodv  to  new 
societies,  for  whom  it  issues  model  rules,  systems  of 
bookkeeping,  and  other  such  practical  literature. 
Sometimes  it  sends  agitators  into  unorganized  com- 
munities to  encourage  the  formation  of  new  societies, 
but  this  policy  is  no  longer  carried  out  as  much  as 
formerly.  Great  Britain  being  now  practically  cov- 
ered from  end  to  end  by  cooperative  organization. 
The  Union  also  maintains  a  parliamentary  committee 
to  guard  its  interests  in  Parliament;  to  see  that  the 
private  traders  do  not  succeed  in  passing  adverse  leg- 


FEDERATION  39 

islation  against  the  movement,  etc.  That  it  accom- 
plishes a  great  service  for  the  local  societies  is  obvious 
from  the  fact  that  practically  all  the  British  societies 
have  joined  the  Union,  the  census  figures  of  the 
government  being  very  little  larger  than  those  re- 
ported by  the  Union  at  the  yearly  congress. 


CHAPTER  V 

COOPERATIVE    PRODUCTION 

With  the  complete  and  successful  operation  of  the 
two  British  wholesale  societies  cooperation  had  pene- 
trated within  capitalist  industry  to  the  point  of  manu- 
facturing; production.  It  had  covered,  within  its  own 
field,  the  whole  business  of  distribution.  It  extended 
from  the  doors  of  the  farmer  or  the  manufacturer  to 
the  door  of  the  ultimate  consumer,  eliminating  there- 
from the  shopkeeper,  the  wholesaler,  jobber,  and  com- 
mission merchant.  And  there  it  paused  for  some 
years,  while  it  consolidated  the  positions  it  had  won. 
And  there,  according  to  the  opinions  of  many,  includ- 
ing some  prominent  economists,  it  must  halt  forever. 
Wherefore  the  name,  "  distributive  cooperation." 

Radical  economists,  including  no  less  a  person  than 
Lasalle,  have  referred  to  consumers'  cooperation  with 
unhidden  contempt,  a  penny-saving  device,  of  no  so- 
cial significance.  That  they  should  have  been  misled 
in  their  understanding  of  cooperation  is  not  to  their 
discredit,  for,  as  we  shall  see  presently,  all  the  litera- 
ture arising  from  the  movement,  with  the  exception 
of  some  recent  essays  and  books,  has  been  the  product 
of  men  who  themselves  never  realized  the  true  nature 
of  Consumers'  Cooperation. 

As  the  critics  have  pointed  out,  not  without  rea- 
son, so  long  as  the  distributive  system  of  the  consum- 
ers' organizations  is  divorced  from  its  sources  of 
supply,  it  remains  economically  in  chains,  socially  in- 

40 


COOPERATIVE   PRODUCTION  4I 

significant,  truly  a  mere  device  for  reducing  the  cost 
of  living  by  a  limited  percentage. 

Even  as  such  it  would  inevitably  fail  in  its  purpose. 
Wages,  as  Lasalle  pointed  out,  tend  automatically  to 
remain  at  the  level  of  bare  subsistence.  Labor  organ- 
ization may  indeed  force  wages  upward.  But  then 
invariably  the  cost  of  living  follows  the  upward  course. 
When  the  coal  miners  of  Pennsylvania  forced  a  raise 
in  their  wages,  in  1903,  the  price  of  coal  was  raised 
more  than  sufficiently  to  make  up  the  loss  to  the  coal 
operators.  The  rise  in  the  price  of  coal  was  felt  by 
the  whole  body  of  the  working  classes,  as  consumers, 
though  only  the  miners  had  benefited  by  the  rise  in 
wages.  Higher  prices  for  coal,  also,  automatically 
brought  higher  costs  in  manufacturing,  for  which  the 
manufacturers  were  bound  to  recoup  themselves  by 
higher  prices  for  their  commodities.  Thus  the  public 
at  large,  and  not  the  employing  class,  more  than  paid 
the  miners  their  rise  in  wages.  Another  illustration 
was  the  Lawrence  strike,  in  which  the  strikers  gained 
a  ten  or  fifteen  per  cent  raise  in  wages.  Simultane- 
ously the  cost  of  cotton  goods  went  up  from  fifteen 
to  twenty  per  cent. 

This  tendency  on  the  part  of  the  cost  of  living,  to 
rise  with  wages,  cannot  be  permanently  checked,  even 
by  a  general  system  of  cooperative  distribution.  For 
the  fixing  of  the  prices  is  not  with  the  retailers,  nor 
with  the  wholesalers,  but  with  the  manufacturers  and 
the  agricultural  producers,  outside  the  control  of  the 
cooperative  stores. 

This  defect  in  their  system  the  Cooperators  of 
Great  Britain  realized  at  a  very  early  stage  of  their 
experience.  They  grew  familiar  with  the  practice  of 
wholesalers  and,  later,  manufacturers  to  raise  prices 
on  Cooperators,   "  because  they   can   afford  to  pay 


42  CONSUMERS     COOPERATION 

more."  Hence  rose  the  cry  of  "  a  cooperative  source 
of  supply." 

In  other  words,  the  Cooperative  Movement  must  get 
control  of  production. 

Chief  among  those  who  realized  this  need  and  pro- 
posed to  supply  it  was  a  small  but  very  influential  group 
of  social  reformers  calling  themselves  Christian  Social- 
ists. They  were  the  logical  successors  of  the  early 
Owenite  idealists,  educated  and  mostly  wealthy  men, 
most  prominent  among  them  being  Vansittart  Neale, 
Thomas  Hughes,  author  of  "  Tom  Brown's  School 
Days,"  Charles  Kingsley,  still  more  famous  as  an 
author,  Frederick  Maurice,  and  John  Ludlow.  They 
were  essentially  Owenites  in  all  except  one  feature. 
Owen  had  been  anti-church,  even  anti-religious,  in  an 
orthodox  sense.  This  had  made  him  widely  disliked. 
These  men  were  all  stanch  members  of  the  established 
church;  therefore  the  qualifying  adjective  before  their 
socialism,  to  distinguish  themselves  from  the  earlier 
Owenites.  Closely  allied  to  them  was  Jacob  Holyoake, 
except  that,  like  Owen,  he  rejected  the  religious  quali- 
fication. To  this  day  Holyoake  is  still  widely  regarded 
as  the  historian  of  the  British  cooperative  movement, 
on  account  of  his  extensive  writings  on  certain  phases 
of  it. 

Like  Owen  and  his  followers,  the  Christian  Social- 
ists clung  to  the  idea  of  a  close  interpretation  of  the 
formula  of  the  collective  ownership  of  the  tools  of 
production.  To  them  it  meant  that  the  actual  workers 
in  a  factory  plant  should  own  and  control  that  plant, 
and  divide  its  commercial  profits  among  themselves. 
They  could  not  see  the  broader  collectivity  of  society 
at  large.  But  they  modified  Owen's  ideas  of  com- 
munistic communities  considerably.  The  modified 
form  of  cooperative  production  which  they  advocated 


COOPERATIVE   PRODUCTION  43 

and  promoted  they  imported  from  France,  where  it  was 
initiated  by  the  followers  of  Buchez  and,  at  a  later 
period,  developed  to  a  considerable  extent  under  the 
patronage  of  the  French  Government,  to  serve  as 
a  check  on  trade-unionism. 

The  activities  of  the  Christian  Socialists  began  in 
1848,  when  they  issued  an  organ  in  which  they  at- 
tacked vigorously  the  evils  of  the  capitalist  system, 
especially  sweatshop  industry.  "  Alton  Locke," 
Kingsley's  novel,  was  part  of  this  propaganda. 

Two  years  later  they  organized  the  "  Society  for 
the  Promotion  of  Workingmen's  Associations,"  which 
carried  on  a  special  propaganda  for  "  self-governing 
workshops,"  the  form  of  enterprise  which  the  Chris- 
tian Socialists  contended  later  would  give  the  con- 
sumers' stores  their  cooperative  source  of  supply. 

The  principles  on  which  these  productive  societies 
were  founded  were  never  very  clearly  defined,  being 
subject  to  all  sorts  of  compromise  so  that  the  actual 
enterprises  which  came  into  existence  were  divided  into 
an  endless  number  of  "  types."  But  the  main  idea 
seemed  to  be  that  a  certain  group  of  workingmen 
should  organize  themselves  into  a  society,  each  should 
subscribe  some  money  toward  the  working  capital  of 
a  productive  enterprise,  should  have  a  vote  in  its 
management,  and  should  share  in  its  profits  when  the 
products  of  the  enterprise  had  been  sold  on  the  open 
market.  This  was  the  ideal.  The  Christian  Socialists 
saw  the  whole  world  of  industry  eventually  trans- 
formed into  a  vast  number  of  such  independent  manu- 
facturing groups.  They  were  the  forerunners  of  the 
present-day  Syndicalists,  whose  theory  it  is  that  the 
workers  in  every  separate  industry  should  own  and 
control  all  the  material  property  and  machinery  con- 
nected with  that  industry.     The  miners  should  own 


44  CONSUMERS     COOPERATION 

the  mines,  the  railroad  men  should  own  the  railroads 
and,  presumably,  as  Mrs.  Webb  remarks,  the  school- 
teachers should  own  the  schools  and  the  street  sweep- 
ers should  own  the  streets.  At  any  rate,  there  is 
no  logical  dividing  line  between  practical  possibility 
and  absurdity,  if  the  idea  is  followed  out  to  its 
^  end. 

The  first  batch  of  these  enterprises  which  the  Chris- 
tian Socialists  turned  out  and  supported  failed  as 
completely  as  did  Owen's  communistic  schemes. 
From  this  experience  they  saw  that  it  was  one  thing 
to  manufacture  commodities,  but  quite  another  thing 
to  market  them.  Vaguely  they  sensed  the  important 
truth  that  distribution  must  be  organized  before  pro- 
duction; that  a  manufacturer  must  prepare  an  outlet 
for  his  goods.  In  the  capitalist  world  salesmanship 
provides  for  this.  The  promoters  of  the  self-govern- 
ing workshops  had  not  provided  for  salesmanship.  It 
came  to  the  Christian  Socialists  that  the  organized 
cooperative  stores  would  be  the  ideal  market  for  their 
self-governing  workshops.  The  two  together  would 
form  a  complete  cooperative  commonwealth.  The 
self-governing  workshops  would  have  their  market; 
the  stores  would  have  their  cooperative  source  of  sup- 
ply. They  were  even  willing  to  concede  that  the  store 
societies  should  have  a  voice  in  the  government  of  the 
productive  plants  of  the  manufacturing  societies, 
though  they  thought  it  no  more  than  right  that  the 
store  societies  should  furnish  the  greater  part  of  the 
capital. 

With  these  ideas,  the  Christian  Socialists  were, 
withal,  enthusiastic  supporters  of  the  consumers'  move- 
ment. Vansittart  Neale  and  Hughes,  both  lawyers, 
had  been  hard-fighting  champions  for  the  movement 
in  Parliament  and  the  courts;  it  was  Neale  who  had 


COOPERATIVE   PRODUCTION  45 

drafted  the  bill  making  the  Wholesale  possible. 
Again,  Neale  had  been  the  leading  spirit  in  the  organ- 
ization of  the  Cooperative  Union,  of  which  he  was 
general  secretary  for  over  twenty  years.  Holyoake,  a 
firm  believer  in  the  economic  theories  of  the  Christian 
Socialists,  had  lectured  and  agitated  for  the  coopera- 
tive stores  ever  since  he  had  urged  the  Rochdale  weav- 
ers to  organize  their  store.  Aside  from  this,  they  were 
all  men  of  such  undoubted  sincerity,  so  obviously 
self-sacrificing  and  unselfish,  and  of  such  high  ideal- 
ism that  even  those  who  later  became  their  bitterest 
opponents  could  never  refer  to  them  personally  ex- 
cept with  words  of  deepest  respect.  Thus  their  moral 
sway,  their  influence,  over  the  movement  was  almost 
autocratic.  And  this  influence  they  wielded  to  its 
fullest  extent  in  favor  of  their  economic  theories.  To 
this  day  the  literature  of  the  Cooperative  Union  is  not 
entirely  purged  of  their  economic  fallacies,  while  all 
the  books  that  have  been  written  on  the  subject  of 
cooperation,  with  a  few  late  exceptions  (and  Mrs. 
Webb's  treatise,  published  in  1891,  which  first  ex- 
posed their  unsoundness),  have  been  from  the  Chris- 
tian Socialist  point  of  view,  either  ignoring  or  con- 
demning the  subsequent  course  followed  by  Consum- 
ers' Cooperation  into  the  field  of  production.  Because 
of  this,  there  still  prevails  in  this  country,  where  ex- 
tensive efforts  were  made  to  establish  self-governing 
workshops,  the  impression  that  cooperative  production 
has  been  given  a  fair  trial  —  and  has  failed. 

Meanwhile,  in  the  early  seventies,  the  English 
Wholesale  was  being  confronted  by  a  variety  of  new 
problems,  none  very  important  in  itself,  but  all  com- 
bined, served  to  guide  the  consumers'  movement  to- 
ward the  long-sought  goal:  a  cooperative  source  of 
supply. 


46  consumers'  cooperation 

First  of  all,  the  loan  deposits  from  the  members 
were  troubling  the  local  societies.  In  spite  of  the 
low  rate  of  interest  paid  on  these  savings  in  trust,  they 
accumulated  in  such  volume  that  the  local  societies  had 
trouble  to  decide  how  to  invest  this  money.  Some 
took  shares  in  private  corporations,  especially  in  rail- 
road securities,  but  it  was  very  soon  discovered  that 
this  was  a  bad  cooperative  principle;  giving  the  op- 
ponents of  the  movement  the  use  of  cooperative  capital. 
So  the  local  societies  began  shifting  their  troubles  over 
to  the  Wholesale  by  turning  the  money  over  to  it, 
especially  after  the  banking  department  was  opened. 
Thus  the  Wholesale  found  itself  in  possession  of  more 
capital  than  it  knew  what  to  do  with. 

Another  annoyance  to  the  Wholesale  officials,  at 
about  this  time,  was  the  tendency  on  the  part  of  private 
manufacturers  to  either  discriminate  against  it,  or  boy- 
cott it  entirely.  In  fact,  one  trade  journal  had  set 
deliberately  to  work  to  organize  a  general  boycott  of 
the  cooperative  movement,  though  not  with  any  marked 
success.  Undoubtedly  wholesale  merchants  and  other 
middlemen  were  able  to  bring  pressure  to  bear  on 
individual  manufacturers  and  force  them  to  boycott 
at  least  the  Wholesale. 

These  were  both  factors  which  led  to  the  mo- 
mentous decision  taken  in  1872.  In  one  of  the  quar- 
terly meetings  held  that  year  it  was  suddenly  proposed 
that  the  Wholesale  engage  in  manufacturing  goods  for 
its  own  constituents. 

From  that  moment  the  movement  was  divided  into 
two  strongly  opposed  factions,  exciting  a  controversy 
between  the  leading  spirits  on  each  side  which  was 
saved  from  becoming  bitter  only  by  the  mutual  re- 
spect they  really  bore  for  each  other's  personalities. 
Vituperation  certainly  never  has  been  a  feature  of  the 


COOPERATIVE    PRODUCTION  47 

cooperative  movement,  either  in  its  debates  or  its 
journalism. 

The  Christian  Socialists  were  naturally  opposed  to 
this  step.  By  this  time  they  had  succeeded  in  in- 
fluencing a  great  number  of  the  stores  to  support 
productive  enterprises  based  on  their  theory. 
Through  this  support  a  number  of  these  self-govern- 
ing workshops  had  been  able  to  establish  themselves, 
though  they  were  now  no  longer  "  self-governing." 
Also,  they  had  persuaded  the  Wholesale  to  act  as 
agents  for  a  great  number  of  others,  thus  opening  a 
market  for  them. 

If  the  Wholesale  now  engaged  in  manufacturing  it- 
self, that  would  mean  the  death  of  the  productive  so- 
cieties. Naturally,  the  stores  owed  first  allegiance  to 
the  Wholesale  enterprises.  This  would  close  the  con- 
sumers' organizations  as  a  market  to  the  self-govern- 
ing workshops. 

The  Christian  Socialists  themselves  were  in  a  small 
minority,  the  rank  and  file  having  little  opinion,  one 
way  or  another.  But  their  influence  was  strong. 
Even  on  the  management  committee  of  the  Wholesale 
there  were  several  individuals  who  opposed  the  pro- 
posed step,  through  their  sympathy  for  Vansittart 
Neale,  Hughes,  and  their  group. 

But  "  economic  determinism,"  to  use  Socialist  ter- 
minology, carried  the  day.  The  economic  advantages 
in  favor  of  the  Wholesale  going  into  manufacturing 
were  so  obvious  that  the  delegates  at  the  meeting  voted 
in  favor  of  it  by  a  large  majority. 

First,  there  were  the  two  considerations  already 
mentioned.  With  more  capital  than  it  knew  how  to 
dispose  of  to  advantage,  the  Wholesale  could  be  in- 
dependent of  any  manufacturer  who  chose  to  discrim- 
inate against  it. 


48  consumers'  cooperation 

Then,  there  was  a  magnificently  organized  market 
behind  every  productive  enterprise  the  Wholesale 
might  choose  to  open.  It  needed  no  large  business  ex- 
perience for  each  delegate  to  see  the  big  economy  that 
might  thus  be  effected,  through  the  elimination  of  the 
gigantic  expense  of  advertising  and  salesmanship. 
Every  true  Cooperator  would  be  a  walking  advertise- 
ment for  the  Wholesale  products.  Where  a  private 
manufacturer  would  have  to  spend  vast  sums  of  money 
in  building  up  the  "  good  will  "  of  his  trade,  the  Whole- 
sale enterprises  would  begin  business  already  provided 
with  this  expensive  element  to  commercial  success. 
There  were  at  that  moment  one  hundred  and  fifteen 
thousand  heads  of  families  affiliated  with  the  insti- 
tution. What  would  not  a  private  corporation  give 
for  the  "  good  will "  of  such  a  market?  Surely  they 
would  grant  their  good  will  to  the  Wholesale  enter- 
prises, for  would  they  not  be  theirs  ?  Aside  from  that, 
there  were  another  three  hundred  thousand  Coopera- 
tors,  not  yet  affiliated,  but  strongly  sympathetic. 

These  were  the  chief  arguments  which  persuaded  the 
assembled  delegates  at  that  historic  meeting  to  re- 
spond with  a  roaring  "  aye !  "  when  the  chairman  put 
the  question  to  the  house :  shall  the  Wholesale  begin 
production  on  its  own  account? 

Shortly  after  a  piece  of  ground  was  bought  at 
Crumpsall  and  a  factory  for  the  manufacture  of  bis- 
cuits, or  crackers,  as  we  call  them,  was  built  on  it. 
In  the  following  February  the  committee  announced 
that  the  plant  was  in  successful  operation.  In  the  fol- 
lowing November  a  boot  and  shoe  factory  was  es- 
tablished and  a  hundred  men  were  set  to  work  mak- 
ing boots  and  shoes  exclusively  for  British  Coopera- 
tors.  And  less  than  a  year  later  cooperative  soap  was 
being  delivered  to  the  stores.     But  here  the  Wholesale 


COOPERATIVE   PRODUCTION  49 

paused  for  a  while.  With  these  enterprises  it  experi- 
mented for  some  years,  before  it  went  ahead  again. 

Meanwhile,  how  were  the  Christian  Socialists  tak- 
ing this  decision  against  their  theories  ? 

Not  quietly,  by  any  means.  Fighters  to  every  fiber 
of  them,  convinced  that  they  were  right  to  the  point  of 
fanaticism,  they  took  up  the  battle  against  what  they 
considered  a  betrayal  of  fundamental  cooperative  prin- 
ciple and  waged  it  to  the  death,  through  more  than 
twenty  long  years. 

Vansittart  Neale  had  been  present  at  the  Wholesale 
quarterly  meeting  at  which  the  famous  resolution  had 
been  passed.  So  powerful  was  his  influence  that  he 
succeeded  then  and  there  in  having  another  resolu- 
tion passed,  by  which  the  workers  in  the  manufacturing 
plants  of  the  Wholesale  should  "  share  in  the  profits." 

At  a  later  meeting  E.  O.  Greening,  another  partisan 
of  the  self-governing  workshop  theory,  moved  for 
the  appointment  of  a  committee  to  report  on  "  deter- 
mining the  relations  between  the  Wholesale  and  its 
manufacturing  establishments  on  a  sound  cooperative 
footing."  This  led  to  the  proposal  that  each  manu- 
facturing establishment  should  be  a  separate  enter- 
prise; that  while  the  Wholesale  should  finance  it  and 
have  a  voice  in  its  control,  the  workers  in  each  es- 
tablishment were  to  control  also  and  have  half  the 
"  profits."     This  proposition  was  turned  down. 

Defeated  in  the  quarterly  meetings  of  the  Whole- 
sale, the  Christian  Socialists  now  turned  to  another 
quarter  —  the  yearly  congress.  Here  they  might  ex- 
pect to  exert  more  influence,  for  several  reasons. 
Vansittart  Neale  was  secretary  of  the  Cooperative 
Union,  which  organized  the  congresses.  And  the  dele- 
gates to  the  congress  included  representatives  from  a 
number    of    the    self-governing    workshop    societies. 


50  CONSUMERS     COOPERATION 

which  were  members  of  the  Cooperative  Union  but,  by 
their  very  nature,  could  not  well  be  members  of  the 
Wholesale. 

At  the  yearly  congress  held  in  1873,  at  Newcastle, 
the  Christian  Socialists  brought  up  the  question  of  co- 
operative production  and  the  form  which  the  move- 
ment should  adopt.  And  here  their  efforts  resulted 
in  a  partial  victory.  The  congress  approved  of  the 
self-governing  workshop  but,  naturally,  did  not  quite 
declare  that  the  Wholesale  should  turn  over  its  manu- 
facturing plants  to  the  employees  of  those  plants.  It 
did,  however,  declare  for  the  "  participation  of  the 
workers  in  profits  and  management  "of  enterprises 
in  which  they  were  engaged. 

To  this  extent,  at  least,  the  congresses  were  always 
on  the  side  of  the  Christian  Socialists,  and  even  to 
this  day,  as  a  body  which  is  supposed  to  formulate  co- 
operative principle,  the  Cooperative  Union  has  no  very 
definite  ideas  as  to  what  constitutes  true  principle  in 
cooperative  production.  Its  official  textbook  extols 
both,  naively  unconscious  of  the  impression  that  must 
strike  the  student :  that  the  two  systems  are  mutually 
exclusive.  For  definite  principles  one  must  turn  to 
the  Wholesale,  the  true  parliamentary  body  of  the 
English  cooperative  movement. 

The  Wholesale,  naturally,  would  take  no  instruc- 
tion from  any  other  body  than  the  delegates  to  its 
own  quarterly  meetings.  On  the  other  hand,  how- 
ever, the  committee  of  management  did  recognize  the 
resolutions  of  the  congress  as  a  moral  influence,  put- 
ting them  in  a  divided  state  of  mind  that  was  to 
prove  almost  disastrous  to  the  whole  institution. 

As  has  already  been  stated,  the  Wholesale  had  taken 
up  the  functions  of  banking.  It  received  deposits 
from  the  consumers'  societies,  from  trades-unions  and 


COOPERATIVE    PRODUCTION  5 1 

other  working-class  organizations,  and  from  a  number 
of  self-governing  workshops.  But  in  regard  to  the 
latter,  the  tendency  was  all  the  other  way.  Numbers 
of  these  began  turning  to  the  Wholesale  for  loans  and, 
considering  the  attitude  of  the  congress,  the  Whole- 
sale officials  felt  that  they  could  not  refuse  these  ap- 
peals for  financial  assistance,  especially  in  special  in- 
stances where  they  were  strongly  recommended  by 
such  leaders  as  Vansittart  Neale,  Hughes,  and  others. 

The  first  disaster  came  through  the  failure  of  the 
Ouseburn  Company,  a  self-governing  workshop  so- 
ciety near  Newcastle,  engaged  in  the  manufacture  of 
steam  engines.  To  save  itself  from  impending  bank- 
ruptcy, the  chief  official  of  this  company  had  previously 
organized  a  "  cooperative  bank  "  in  Newcastle,  whose 
shares  had  been  sold  to  both  cooperative  societies  and 
individuals.  This  bank  had  also  been  supported  by 
the  Christian  Socialists,  who  were  strongly  opposed 
to  the  banking  system  of  the  movement  being  in  the 
hands  of  the  Wholesale.  It  should  be  a  separate  insti- 
tution, they  contended,  and  here,  at  least,  there  was 
some  soundness  to  their  argument,  for  it  is  not  alto- 
gether well  that  too  much  power  should  be  given  over 
to  one  group  of  officials.  But  in  this  case  the  alterna- 
tive institution  was  not  even  a  separate   federation. 

The  Ouseburn  Company  failed,  and  the  Wholesale 
lost  in  the  neighborhood  of  forty  thousand  dollars. 
Then  followed  the  bankruptcy  of  the  Newcastle  bank- 
ing concern.  Nearly  all  the  cooperative  societies  in 
this  region  were  involved,  either  as  shareholders  or 
as  depositors.  The  result  was  that  there  was  a  heavy 
run  on  the  Wholesale's  banking  department,  where 
they  had  also  placed  deposits. 

In  such  serious  straits  was  the  Wholesale  that  its 
chairman  had  to  journey  to  London  to  arrange  with 


52  CONSUMERS     COOPERATION 

a  London  banking  firm  for  the  carrying  over  of  a 
debit  balance  amounting  to  a  quarter  of  a  million 
dollars.  Even  after  that  the  situation  was  so  desper- 
ate that  an  appeal  had  to  be  made  to  some  of  the 
larger  consumers'  societies,  and  the  Rochdale  society, 
among  others,  responded  loyally  with  substantial 
loans. 

"  This  was  in  1876-7,"  says  Percy  Redfern,  in  his 
"  History  of  the  C.  W.  S.,"  "  and  with  two  or  three 
years  more  of  trouble  ahead  it  was  fortunate  for  the 
stores'  federation  that  its  constitution,  rules,  and  meth- 
ods secured  to  it  such  great  reserves  of  strength." 

It  was  during  this  period,  about  the  middle  seven- 
ties, that  the  rapid  development  of  manufacturing,  both 
in  Great  Britain  and  abroad,  brought  to  a  climax  the 
tremendous  and  growing  demand  for  coal.  Though 
mines  were  opened  one  after  another  and  the  mining 
industry  expanded,  the  demand  ever  kept  ahead  of 
the  supply.  This  condition  had  encouraged  the  or- 
ganization of  a  great  number  of  colliery  societies, 
based  on  the  self-governing  workshop  principle,  these 
societies  obtaining  leases  on  coal  lands  and  operat- 
ing them  cooperatively. 

While  the  boom  lasted  these  little  enterprises  made 
big  profits  for  their  members.  Yet  more  continued 
to  be  organized  and,  under  pressure  from  the  Chris- 
tian Socialists,  the  Wholesale  bank  extended  loans 
here  and  there,  becoming  deeply  involved.  One  of 
these  colliery  societies,  the  Bugle  Horn,  succeeded  in 
squeezing  nearly  a  quarter  of  a  million  dollars  out 
of  the  Wholesale  bank  and  a  number  of  big  local 
societies. 

Finally  the  boom  broke,  as  booms  inevitably  do. 
The  little  self-governing  workshop  societies,  naturally, 
with  their  slender   resources,   were   the  first  to   go. 


COOPERATIVE   PRODUCTION  53 

Dozens  of  them  failed.  The  Wholesale,  together  with 
some  of  the  big  store  societies,  was  heavily  involved. 
On  the  Bugle  Horn  the  Wholesale  lost  one  hundred 
thousand  dollars  alone. 

To  the  credit  of  the  Christian  Socialists  it  must 
be  said  that  there  were  individuals  among  them  who 
lost  heavily;  they  had  had  the  conviction  of  their 
theories.  Nor  did  any  of  them  ever  reproach  the 
managers  of  the  Wholesale  for  the  losses  which  were 
suffered  by  that  institution. 

But  the  Wholesale  Society  was  forever  done  with 
the  workshop  societies.  Barely,  through  its  endeavors 
to  give  financial  support  to  the  experiments  of  visionar- 
ies, did  it  escape  a  disaster  which  must  have  delayed 
the  progress  of  the  whole  movement  for  another  gen- 
eration. Henceforward  it  presented  a  firm  and  un- 
broken opposition  to  the  attacks  of  the  Christian  So- 
cialists. 

As  for  these  earnest,  if  mistaken,  champions  of  the 
workingmen,  even  they  seem  to  have  been  impressed 
by  the  failures.  At  any  rate,  we  hear  little  more  of 
self-governing  workshops  as  such.  They  modified 
their  theories  considerably,  in  their  propaganda,  at 
least. 

Instead,  they  took  up  the  slogan  of  profit  sharing, 
the  "  participation  of  the  workers  in  industry."  To 
them  and  their  present-day  successors  such  an  estab- 
lishment as  the  Ford  automobile  company  and  our 
United  States  Steel  Corporation  are  on  a  more  direct 
road  toward  the  cooperative  commonwealth  than  the 
Wholesale  Society  of  Manchester,  because  these  pri- 
vate corporations  give  a  bonus  on  wages,  a  share  in 
profits,  to  their  employees.  By  this  method,  they  be- 
lieved, the  workers  would  obtain  an  ever-increasing 
share  in  the  control  of  the  industries  and,  perhaps, 


54  CONSUMERS     COOPERATION 

finally  obtain  full  control,  ousting  the  private  capital- 
ists. 

As  for  the  workshop  societies,  they  survive  only  as 
a  conception.  They  were  extensively  experimented  in 
in  this  country  twenty  or  thirty  years  ago,  notably  in 
Minneapolis,  where  the  coopers  formed  independent 
groups  to  manufacture  barrels  for  the  flour  mills. 
And  even  as  a  certain  school  of  economists  was  point- 
ing them  out  as  the  heralds  of  a  new  industrial  order, 
the  flour  mills  substituted  sacks  for  barrels  —  and 
there  were  no  more  independent  cooperage  shops. 

To  us,  living  in  an  age  of  billion-dollar  corporations, 
it  is  easier  to  see  the  fallacy  of  a  manufacturing  plant 
being  capitalized  and  administered  by  the  actual  work- 
ers engaged  within  its  four  walls.  The  Christian  So- 
cialists clearly  did  not  foresee  the  present  centraliza- 
tion of  industry  into  huge  plants  costing  hundreds  of 
millions  of  dollars,  wherein  single  workers  may  be  op- 
erating machines  costing  hundreds  of  thousands  of 
dollars.  They  could  not  get  away  from  the  old  con- 
ception of  each  worker  owning  the  tools  in  his  own 
hands,  as  he  did  in  the  handicrafts  period.  That  ali 
the  workers  together,  as  a  mass,  should  combine,  and 
own  and  control  collectively  all  the  machinery  of  pro- 
duction was  a  conception  they  would  not  face.  It  is  on 
this  latter  principle  that  the  modern  cooperative  move- 
ment has  developed  itself. 


CHAPTER  VI 

COOPERATION    SPREADS    ABROAD 

It  was  essentially  logical  that  cooperation  should  have 
its  inception  in  Great  Britain.  A  populous  island, 
with  many  good  harbors,  Great  Britain  was  by  nature 
destined  to  be  a  great  commercial  and  manufacturing 
center.  There,  consequently,  the  ingenuity  of  man 
was  stimulated  to  the  invention  of  steam-driven  ma- 
chinery. Thus  here  was  enacted  the  first  scene  of  the 
great  industrial  revolution.  With  the  new  system 
of  industry  came  the  attending  evils  of  unemployment 
and  poverty  and  all  their  resulting  problems.  There, 
then,  the  remedies  for  those  evils  would  first  be 
formulated.  And  cooperation  is  the  essence  of  all 
those  remedies. 

With  the  institution  of  railroad  transportation  the 
new  industrialism  spread  into  other  countries,  thus 
creating  there  the  same  conditions  which  had  created 
and  developed  cooperation  in  England. 

We  need  not  follow  the  spread  of  cooperation  over 
the  Continent  too  closely;  in  each  country  early  ex- 
periences, countless  experiments,  and  countless  fail- 
ures were  very  much  the  same  as  in  Great  Britain, 
Every  national  cooperative  movement  acknowledges 
its  indebtedness  to  the  Rochdale  Society.  Its  simple 
system  seemed  adapted  to  all  those  many  environ- 
ments. Rochdale  was  undoubtedly  the  first  perfect 
bloom  whose  seeds,  on  ripening,  were  wafted  to  all 
four  corners  of  the  civilized  world.  Wherever  the 
soil  was  fertile  and  the  conditions  propitious,  as  they 

55 


^ 


56  consumers'  cooperation 

were  everywhere,  sooner  or  later,  there  they  germi- 
nated and  developd  into  plants  as  perfect  as  the  parent 
and  usually  true  to  type. 

It  is  a  curious  fact,  considering  the  tardy  develop- 
ment of  cooperation  in  this  country,  that  the  United 
States  ranks  as  one  of  the  first  in  following  the  ex- 
ample of  the  British  workers  in  their  attempts  at  co- 
operative experiment.  In  the  very  year  that  the  little 
store  in  Toad  Lane,  in  Rochdale,  was  opened  to 
business,  in  1844,  a  Boston  tailor,  John  G.  Kaulback, 
organized  a  somewhat  similar  enterprise  which  in  the 
following  year  became  a  regular  store,  the  first  of  a 
series  which  became  quite  a  widespread  movement  in 
the  New  England  states.  But  that  we  shall  consider 
later,  in  a  special  chapter. 

Nearly  all  the  European  countries  seem  to  have 
witnessed  attempted  organizations  of  consumers  dur- 
ing the  fifties,  following  the  social  unrest  created  by 
the  revolutionary  disturbances  of  1848,  a  fact  which 
may  deserve  special  notice  at  this  time,  when  the 
atmosphere  is  charged  with  labor  unrest  and  Bol- 
shevism. Naturally,  there  are  no  detailed  records. 
Who  would  be  interested  in  the  attempts  of  a  few 
workingmen  to  cheapen  the  cost  of  living  by  pooling 
their  little  household  purchasings?  As  in  Great 
Britain,  the  movers  themselves  were  unconscious  of 
any  social  significance  attached  to  their  efforts,  for 
their  motives  were  purely  utilitarian.  Yet  some  of 
these  organizations  succeeded,  grafted  the  Rochdale 
system  on  their  enterprises  when  they  heard  of  it,  and 
survived  to  become  great  economic  institutions  of 
the  present  day. 

The  first  widespread  knowledge  of  Rochdale  seems 
to  have  been  acquired  in  Europe  during  the  early  six- 
ties.    During  that  decade  the  system  was  adopted  in 


COOPERATION   SPREADS   ABROAD  57 

practically  all  countries.  By  that  time  the  by-laws 
of  the  Rochdale  Society  could  be  found  in  transla- 
tion in  all  the  languages  of  the  Continent,  and  in 
some  it  was  being  spread  broadcast  to  awaken  a  social 
consciousness  among  the  people.  The  twenty-eight 
weavers,  at  least,  had  been  fully  conscious  of  a  great 
ultimate  aim,  for  in  those  by-laws  there  are  sugges- 
tions of  a  wonderfully  reconstructed  society,  as  in 
**  that  as  soon  as  possible  this  society  shall  proceed  to 
arrange  the  powers  of  production,  distribution,  educa- 
tion, and  government,  etc."  Everywhere  this  spirit 
was  accepted  with  the  method.  Not  even  now  has 
the  name  of  Karl  Marx  acquired  such  universal  sig- 
nificance among  the  masses  of  all  lands  as  did  the 
name  of  this  grimy,  English  manufacturing  town,  the 
Mecca  of  cooperation,  as  a  Belgian  pilgrim  termed 
it,  on  a  visit  to  the  famous  store.  It  was,  in  fact, 
the  gospel  of  Dr.  King,  who  had  preached  it  unheard. 
Now,  in  the  early  sixties,  the  people  seemed  prepared 
to  listen. 

The  Swiss  afford  some  of  the  earliest  records  on  the 
Continent.  In  185 1  was  founded  the  Zurich  "  Kon- 
sumverein,"  the  first  occasion  on  which  this  significant 
German  word  was  used.  This  enterprise  consisted 
of  a  bakery,  which  prospered,  so  that  two  years  later 
a  grocery  store  was  opened  with  the  collective  capital 
created  by  the  bakery.  The  society  is  still  in  existence, 
one  of  the  biggest  in  Switzerland.  In  1865  another  so- 
ciety, on  Rochdale  principles,  was  founded  in  Basel; 
to-day  its  membership  includes  practically  the  whole 
city,  which  is  one  of  those  communities  from  which 
cooperation  has  almost  entirely  banished  private  trade. 

In  France  the  first  consumers'  societies  of  which 
there  are  any  record  appeared  in  1866.  But  in  spite 
of  an  early  start,  progress  here  was  slow.     Until  quite 


L 


58  consumers'  cooperation 

recently  it  remained  one  of  the  backward  countries; 
for  France  was  the  original  home  of  the  self-governing 
workshop.  Some  hundreds  of  them  were  organized  in 
Paris  and  its  vicinity  immediately  after  the  revolu- 
tion of  1848  and  subsidized  by  the  government  with 
capital  and  work,  or  custom.  Here,  as  in  England, 
the  upper  classes  became  keenly  interested  in  solving 
the  troubles  of  the  working  people  for  them,  and 
wherever  that  was  the  case  natural  evolution  had  a 
struggle  with  man-made  theories  and  was  often 
checked  by  them  temporarily. 

Denmark,  which  was  to  be  the  first  to  imitate  the 
British  in  establishing  a  wholesale  society,  founded  a 
genuine  Rochdale  store  in  Thisted,  in  1867.  Here 
consumers'  societies  appeared,  not  among  the  indus- 
trial workers  in  manufacturing  centers,  but  in  the 
rural  communities,  among  the  small  peasants  and  ag- 
ricultural workers. 

Germany,  like  France  and  England,  was  troubled  in 
the  beginning  with  theorists.  Chief  of  these  was 
Schulze-Delitzsch,  the  so-called  founder  of  coopera- 
tion in  Germany.  It  was  not  so  much  his  theories, 
however,  which  gave  an  initial  character  to  German 
cooperation,  as  his  natural  conservatism.  Ideals,  in  a 
higher  sense,  he  had  none;  he  was  essentially  a  re- 
former, and  anything  that  tended  toward  revolution  he 
deprecated.  More  practical  than  the  English  or 
French  theorists,  he  had  less  imagination,  less  vision. 
All  forms  of  joint  effort  seemed  good  to  him,  but  they 
must  all  remain  within  bounds.  They  must  not  en- 
croach on  middle-class  privileges. 

In  the  early  fifties  Schulze-Delitzsch  began  a  vig- 
orous propaganda  for  joint  effort,  and  being  a  force- 
ful writer,  he  made  a  wide  impression  and  gained  a 
large  following  among  people  of  the  middle  classes. 


COOPERATION    SPREADS   ABROAD  59 

The  spontaneous  workingmen's  organizations  which 
appeared  during  this  period,  seeking  about  for  a  so- 
cial philosophy,  were  for  a  while  guided  by  the  writ- 
ings of  Schulze-Delitzsch,  and  so  were  delayed  for 
a  decade  or  more  by  an  unnatural  partnership  with  his 
middle-class  organizations. 

The  chief  result  of  this  energetic  leader's  labors 
were  credit  unions;  cooperative  groups  of  small 
tradesmen  who  financed  in  this  way  just  the  shops  the 
consumers'  societies  were  opposed  to.  Almost  every 
writer  on  cooperation  has  included  them  as  legitimate 
members  of  the  great  cooperative  family.  To-day 
they  are  repudiated  by  the  Socialists,  but  many  co- 
operators  are  not  so  discriminating.  Later  these 
tradesmen's  banks  organized  a  great  nation-wide  co- 
operative union,  supposed  to  include  all  forms  of  co- 
operative enterprise,  the  General  Cooperative  Union, 
within  whose  limits  a  number  of  consumers'  societies 
still  slumber.  At  one  time  this  general  union  included 
all  the  consumers'  societies  in  Germany,  but  in  1902 
the  Socialists  among  the  latter  awakened  their  less 
idealistic  comrades,  and  the  stores  began  to  utter 
radical  ideas.  Whereupon,  at  a  general  congress,  a 
resolution  was  passed  expelling  the  radical  consumers' 
groups.  This  high-handed  procedure  resulted  in  a 
general  split;  with  the  expelled  consumers'  societies 
went  the  great  majority  of  all  affiliated  with  the  union, 
including  the  wholesale  society  which  they  had  estab- 
lished in  Hamburg.  The  latter  then  founded  a  union 
of  their  own,  the  Central  Cooperative  Union,  corre- 
sponding to  the  British  Cooperative  Union,  but  by  far 
more  radical  in  tendency,  being,  as  it  was,  itself  the 
result  of  a  revolution  within  the  movement.  Yet  its 
attitude  toward  British  cooperation  may  be  judged 
from  the  following  phrase  in  a  recent  historical  sketch 


6o  consumers'  cooperation 

of  the  German  Wholesale  Society;  "  das  immer  Herr- 
licher  sich  erfiillen  moge  der  Traum  der  Weber  von 
Rochdale." 

In  Italy  consumers'  societies  were  founded  even 
before  national  unity  had  been  attained,  notably  up  in 
the  northern  provinces.  By  1886  there  were  enough 
of  them,  based  on  the  "  sistema  de  Rochdale,"  to  form 
a  national  union  comprising  68  societies.  By  1890 
this  number  had  dwindled  to  24,  but  in  1893  there  were 
50;  then,  each  year  successively,  the  membership  of 
this  federation  increased  to  103,  131,  279,  398,  un- 
til 1898,  when  they  numbered  480.  In  that  year 
there  was  a  revolutionary  disturbance  in  Milan,  the 
center  of  the  League,  and  many  persons  were  arrested 
and  imprisoned,  among  them  the  secretary  of  the 
League  and  many  other  cooperative  leaders.  All  popu- 
lar societies  with  a  radical  tendency  were  suppressed, 
among  them  many  of  the  cooperative  societies,  so 
that  in  1899  there  Avere  only  300  members  in  the 
League.  By  1901  the  number  was  greater  than  ever; 
586,  and  ever  since  there  has  been  a  continuous  in- 
crease, the  number  being  1,933  ^^  1910.  During  this 
period  these  societies  had  held  no  less  than  nineteen 
national  conventions,  or  congresses.  Incidentally,  it 
may  be  mentioned  that  one  of  the  most  energetic  fig- 
ures in  promoting  cooperation  in  Italy  has  been  that 
prominent  statesman,  one  time  Prime  Minister  of  Italy, 
Luigi  Luzzatti,  whom  we  shall  have  occasion  to  men- 
tion again. 

Considering  the  fact  that  Russia  now  stands  as  the 
leading  cooperative  nation,  in  the  sense  that  all  its 
radical  and  progressive  political  parties,  with  the  ex- 
ception of  the  Bolsheviki,  who  insist  on  a  combination 
of  state  ownership  and  syndicalism,  have  officially  com- 
mitted themselves  to  its  principles  as  the  basis  on  which 


COOPERATION    SPREADS   ABROAD  6l 

the  economic  future  of  the  nation  is  to  rest,  there  is 
nothing  out  of  the  ordinary  in  the  early  history  of 
the  Russian  movement  to  relate.  Consumers'  socie- 
ties were  organized  before  the  earliest  agitations  of 
the  Nihilists  in  the  beginning  of  the  sixties.  The  so- 
ciety in  Riga,  established  in  1865,  is  supposed  to  have 
been  the  first.  A  society  which  was  founded  the  fol- 
lowing year,  in  Perm,  is  still  prospering.  In  1872 
the  English  Wholesale  was  receiving  regular  orders 
for  goods  from  a  society  in  Kharkov,  southern  Russia, 
which  thus  exercised  its  right  as  a  cooperative  society 
to  purchase  from  an  institution  limiting  its  sales  en- 
tirely to  such  customers.  Nevertheless,  there  was  not 
much  progress  in  Russia  during  the  following  years. 
The  government  placed  every  possible  obstacle  in 
the  way  of  their  development,  short  of  actual  sup- 
pression. So  many  were  the  formalities  which  had  to 
be  observed  in  obtaining  legal  status  that  it  must  have 
been  a  very  determined  group  of  consumers  which  per- 
sisted to  the  point  of  attaining  it.  It  was  not  until 
after  the  revolutionary  disturbances  of  1905,  when  all 
other  radical  movements  had  been  so  severely  sup- 
pressed, that  consumers'  societies  made  much  head- 
way. By  that  time,  too,  the  government  showed  less 
opposition,  perhaps  going  on  the  theory  that  if  the 
social  unrest  were  diverted  into  these  economic  chan- 
nels the  people  would  have  less  time  or  energy  for 
more  violent  manifestations  of  the  revolutionary 
spirit. 

In  some  countries,  peculiarly  enough,  where  condi- 
tions would  have  seemed  to  have  warranted  an  early 
movement,  there  was  practically  no  cooperative  activ- 
ity until  within  the  past  few  years.  Finland,  now  cov- 
ered with  a  network  of  cooperative  organizations,  with 
one  of  the  most  prosperous  wholesale  societies,  showed 


62  consumers'  cooperation 

not  a  sign  before  the  beginning  of  the  century.  In 
spite  of  the  fact  that  Denmark  made  such  an  early  be- 
ginning, Sweden  and  Norway  showed  no  interest  in 
cooperation  until  well  after  the  beginning  of  the  cen- 
tury, the  Swedish  wholesale  society  being  founded 
in  1904  and  the  Norwegian  in  1907. 

At  the  present  time  the  only  countries  in  Europe 
where  Consumers'  Cooperation  is  not  firmly  estab- 
lished are  Turkey,  Greece,  Montenegro,  Serbia, 
Rumania,  and  Portugal.  On  the  other  hand,  quite 
a  movement  has  been  established  in  Japan,  and  some 
few  societies  are  heard  from  in  Australia  and  in 
South  Africa. 

The  test  of  a  really  established  movement,  undoubt- 
edly, is  the  existence  of  a  federation.  A  wholesale  so- 
ciety, once  founded  on  a  democratic,  representative 
basis,  never  fails.  The  following  list  of  national 
wholesale  societies,  placed  in  the  order  of  their  ap- 
pearance, will  give  some  indication  of  the  path  co- 
operative development  has  taken  in  its  international 
course. 

Manchester,  England   1864 

Glasgow,    Scotland    1868 

Copenhagen,  Denmark  1884 

Rotterdam,  Holland   1890 

Basel,   Switzerland   1892 

Hamburg,  Germany   1894 

Budapest,  Hungary 1899 

Antwerp,  Belgium 1899 

Paris,  France   1900 

Moscow,  Russia  1901 

Stockholm,  Sweden 1904 

Helsingfors,  Finland 1905 

Vienna,  Austria  1905 

Christiania,  Norway  1907 


CHAPTER  VII 

THE  INTERNATIONAL 

It  is  only  a  little  over  twenty-five  years  since  the  Co- 
operative Movement  assumed  an  international  aspect 
in  its  organization,  nor  can  it  be  said  that  this  phase 
of  its  development  has  as  yet  progressed  very  far,  in 
a  material  sense,  at  least.  Nevertheless,  it  is  through 
this  central  body,  the  International  Cooperative  Al- 
liance, that  the  general  spirit  of  the  movement,  as 
a  world  force,  may  best  be  studied.  What  are  the 
principles  and  the  social  aims  to  which  all  the  na- 
tional movements  agree  in  common?  This  only  the 
International  can  tell  us. 

We  already  know  the  physical  structure  of  the  units 
composing  the  movement :  the  local-store  societies,  or 
distributing  centers;  their  business  federations,  com- 
monly called  wholesale  societies,  through  which  the 
local  societies  have  extended  their  control  of  distribu- 
tion to  the  furthermost  point  and,  in  some  cases,  have 
established  original  sources  of  supply  of  their  own ; 
and,  finally,  the  educational,  or  propaganda,  federa- 
tions, through  which  principles  and  modes  of  prac- 
tice are  formulated  and  agitation  is  carried  on  for  the 
extension  of  the  movement. 

There  is  nothing  in  a  great  economic  movement, 
such  as  the  cooperative  societies,  to  confine  it  to  na- 
tional boundaries.  One  of  the  essential  features  of 
the  movement  as  a  whole  is  the  community  of  inter- 
est, not  only  between  the  individuals,  or  between  the 
local  societies,  but  between  the  organizations  in  the 

63 


64  consumers'  cooperation 

various  countries.  Each  society,  however  local,  seeks 
nothing  which  is  not  also  desired  by  every  other  so- 
ciety, at  home  and  abroad. 

This  community  of  interest,  naturally,  made  itself 
manifest  first  within  the  boundaries  of  each  national- 
ity, on  account  of  common  languages  and  proximity. 
But  finally  these  lines  were  also  crossed,  and  repre- 
sentatives of  the  various  national  organizations  came 
together  to  see  wherein  they  could  unite  their  strength 
and  activity  for  whatever  purposes  they  might  have 
in  common. 

The  progress  of  this  tendency  has  been  outlined  in 
a  most  masterly  manner  by  Dr.  Hans  Miiller  in  his 
"  Historical  Development  of  the  International  Co- 
operative Movement,"  published  in  the  First  Yearbook 
of  the  International  Cooperative  Alliance,  in  1910. 
To  this  article  I  am  indebted  for  practically  all  the 
facts  contained  in  this  chapter. 

The  credit  for  the  first  initiative  toward  establishing 
international  relations  between  Cooperators  belongs 
to  a  Frenchman,  E.  de  Boyve,  the  leading  spirit  of 
a  pioneer  group  in  Nimes,  which  also  founded  the  co- 
operative union  of  the  French  societies,  in  1885.  But 
already  before  that  he  had  made  the  acquaintance  of 
Vansittart  Neale,  through  the  correspondence  he 
opened  up  with  the  British  Cooperative  Union,  in 
his  effort  to  secure  information  regarding  the  funda- 
mental principles  and  the  methods  practiced  by  the 
British  societies.  When  he  called  the  conference  of 
the  French  societies  in  Paris,  which  led  to  the  organ- 
ization of  the  French  federation,  the  British  Coopera- 
tive Union  was  invited  to  send  fraternal  delegates, 
and  Neale  was  one  of  these.  In  return  the  British 
invited  the  French  to  send  delegates  to  their  na- 
tional congress  the  following  year,  and  De  Boyve  ap- 


THE   INTERNATIONAL  65 

peared.  It  was  on  this  occasion  that  he  delivered  a 
speech,  in  English,  proposing  an  international  federa- 
tion, an  International  Cooperative  Union,  which  should 
act  as  a  center  of  propaganda  for  the  whole  of  Eu- 
rope, or  the  whole  world.  In  fact,  it  should  "  cor- 
respond with  all  the  cooperative  centers  in  Europe, 
Australia,  and  America,  to  induce  them  to  adopt  the 
high  principles  of  cooperation  by  intervening  in  all 
conflicts  between  Capital  and  Labor."  Apparently 
it  should  also  be  a  sort  of  an  international  board  of 
arbitration  in  labor  disputes. 

As  representative  of  the  spirit  possessing  the  lead- 
ers of  that  time,  it  is  worth  while  quoting  a  few  of 
the  speeches  made  on  this  occasion. 

"  Do  you  not  hear  the  cries  of  hatred  breathed 
forth,"  said  De  Boyve,  "  in  all  parts  of  the  world 
against  their  employers  by  certain  employees,  some- 
times, alas,  excited  by  agitators  whose  only  impulse 
is  hatred,  whose  only  aim  is  the  destruction  of  all  that 
existed,  in  the  hope  that  something  may  spring  out 
of  the  ruins  .  .  .  Folly  on  the  one  side,  selfishness 
on  the  other.  Can  we  behold  with  indifference  our 
brother  workmen  carried  away  by  the  sway  of  pas- 
sion without  telling  them  that  the  means  they  use 
are  keeping  them  from  the  end  they  desire  to  reach, 
while  pacific  means  would  lead  them  to  it?  On  the 
other  hand,  is  it  not  our  duty  to  induce  the  employ- 
ers to  enter  as  much  as  possible  on  the  path  of  con- 
cession and  give  their  workingmen  an  equitable  share 
in  their  profits?  " 

In  the  course  of  a  speech  made  in  reply,  one  of  the 
British  leaders  said : 

"  Years  ago  we  heard  something  of  the  *  Interna- 
tional,' which  alarmed  certain  people,  and  we  desired  to 
lay  the  foundation  of  a  wiser  and  more  peaceful  in- 


66  consumers'  cooperation 

ternational,  which  would  not  indulge  in  folly  and 
selfishness." 

Certainly  the  Christian  Socialists  of  that  period 
must  not  be  confused  with  the  Socialists  of  Karl 
Marx.  As  we  shall  presently  see,  their  whole  atti- 
tude was  one  of  compromise  with  existing  condi- 
tions, in  spite  of  the  vigor  with  which  they  attacked 
the  evils  of  capitalism. 

For  the  next  few  years  the  proposal  to  unite  the  co- 
operative movements  of  the  various  countries  was  the 
subject  of  discussion  at  the  national  congresses  of 
Great  Britain,  France,  and  England.  The  Schulze- 
Delitzsch  societies  in  Germany  refused  to  consider  the 
matter,  preferring  to  wait  until  a  beginning  had  been 
made  and  its  character  assured. 

The  British  societies,  however,  were  the  only  ones 
in  a  position  to  give  financial  support  to  this  impor- 
tant project,  and  they,  through  the  Cooperative  Union, 
seemed  strongly  disposed  to  do  so.  It  was,  as  a  mat- 
ter of  fact,  the  Christian  Socialists  themselves,  with 
Neale  at  their  head,  who  discouraged  immediate  ac- 
tion. 

This  was  their  reason : 

As  will  be  remembered,  they  stood  for  a  definite 
theory  in  cooperative  production.  The  Wholesale 
Society  had  refused  to  accept  this  theory.  Turning 
to  the  Cooperative  Union,  they  had  there  been  more 
warmly  received ;  the  yearly  congress  had  expressed  a 
rather  mild  approval  of  their  theories.  But  there  had 
been  no  concrete  result.  The  Wholesale  was  even 
then,  in  the  middle  eighties,  planning  further  produc- 
tive enterprises,  based  on  the  ownership  and  control 
by  the  consumers.  Once  for  all  they  must  check  this 
tendency;  the  British  cooperative  movement,  from 
top  to  bottom,  must  be  pledged  to  their  theory,  defi- 


THE   INTERNATIONAL  67 

nitely,  before  the  International  was  organized.  For 
their  idea  must  be  embodied  in  the  International,  and 
for  many  years  to  come  the  British  movement  would 
have  moral  control  of  the  International. 

So  they  again  endeavored  to  have  a  resolution  passed 
at  a  cooperative  congress  which  should  plainly  in- 
struct the  Wholesale  to  change  its  plans  for  the  future. 
Hughes  presented  the  resolution  to  this  effect  at  the 
congress,  held  in  Dewsbury,  in  1888,  and  the  Chris- 
tian Socialists  backed  it  with  all  their  forces. 

But  by  this  time  the  advocates  of  the  consumers'  sys- 
tem of  production  had  begun  to  evolve  a  moral  justi- 
fication for  their  system;  that  the  social  body,  repre- 
sented by  the  people  as  consumers,  had  the  right  to  ex- 
ercise absolute  control  over  the  productive  plants  which 
supplied  them  their  own  needs;  that  the  workers  in 
these  plants  were  really  in  the  service  of  the  social 
body  of  which  they  were  themselves  also  members  and, 
as  such,  had  as  much  control  over  working  condi- 
tions as  they  were  entitled  to.  They  were  beginning  to 
sense  the  philosophy  of  the  greater  collectivism:  the 
collectivism  of  the  people  as  a  whole,  represented  by 
the  consumers'  cooperative  society,  with  its  member- 
ship open  to  all  the  world,  on  an  equal  basis,  as  against 
the  narrower  collectivism,  represented  by  the  small, 
exclusive  group  of  workers. 

For  two  days  a  furious  debate  was  carried  on  over 
Hughes'  resolution,  and  at  one  time  a  split  seemed 
unavoidable.  Finally,  however,  a  compromise  resolu- 
tion was  offered  and  passed,  "  suggesting  "  and  "  ad- 
vising "  that  the  Christian  Socialist  theories  be  prac- 
ticed where  possible,  but  so  vaguely  were  these  theories 
themselves  defined  that  local  societies  were  invited  to 
fill  in  details. 

The  total  result  was  nothing  more  than  a  defeat  for 


68  consumers'  cooperation 

the  Christian  Socialists  in  their  own  stronghold,  so 
glossed  over  as  to  save  them  from  humiliation. 

As  undaunted  as  ever,  Neale  and  his  associates  now 
began  planning  new  tactics. 

Their  plan  now  was  nothing  less  than  to  organize 
an  International  in  which  the  British  Cooperative 
Union  should  have  no  part,  no  influence;  develop  it, 
however  slowly,  dedicate  it  to  their  ideas,  then  use  it 
as  a  club  with  which  to  beat  the  British  movement  into 
line,  a  moral  force  which  should  compel  the  Whole- 
sale to  turn  its  manufacturing  plants  over  to  the  em- 
ployees, in  part,  at  least. 

"  Our  international  alliance  makes  little  progress 
and  leads  to  nothing,"  Neale  wrote  to  De  Boyve,  in 
1892,  after  having  resigned  as  general  secretary  of  the 
Cooperative  Union,  "  and  it  cannot  be  otherwise  so 
long  as  it  more  or  less  depends  on  the  English  Whole- 
sale, out  of  which  I  can  get  nothing  and  which  con- 
tinues to  oppose  the  adoption  of  the  principle  of  la- 
bor's participation  in  the  profits.  Having,  therefore, 
nothing  to  set  against  the  revolutionary  Utopias,  we 
cannot  effectively  combat  them.  It  is,  therefore,  im- 
perative that  we  should  make  our  international  co- 
operative alliance  completely  independent." 

Thus  shortly  afterward  a  meeting  of  individuals  fa- 
voring this  plan  was  held  in  Rochdale,  and  a  manifesto 
was  issued,  again  enunciating  the  principle  of  the  self- 
governing  workshop. 

"  At  the  same  time,"  added  the  manifesto,  "  it  is 
clear  that  the  spread  of  a  disposition  among  the  present 
employers  to  introduce  into  their  establishments  the 
system  of  the  participation  of  the  workers  in  profits 
would  tend  to  the  growth  of  this  happier  system  with 
a  rapidity  for  which  it  would  be  hopeless  to  look  for 
in  any  alliance  of  workmen's  productive  societies  stand- 


THE   INTERNATIONAL  69 

ing  alone,  however  successful  their  progress.  .  .  .  For 
this  reason  we  propose  that  the  alliance,  of  which  we 
invite  the  formation,  shall  not  be  confined  to  cooper- 
ative societies  and  organizations  and  their  members, 
but  shall  include  all  firms  or  companies  which  accept 
the  principle  of  the  participation  of  the  workers  in 
profit  as  part  of  their  constitution  or  systematic  prac- 
tice. .  .  ." 

Thus,  partially,  at  least,  and  perhaps  not  quite  con- 
sciously, they  admitted  the  failure  of  their  productive 
societies.  Now  they  called  to  the  leaders  of  capitalist 
industry  to  support  them. 

A  large  number  of  individuals  responded,  among 
them  a  few  representatives  of  private  enterprise.  It 
is  notable  that  among  them  was  Tom  Mann,  later  so 
prominently  identified  with  the  Syndicalist  movement 
in  Great  Britain. 

Later  in  the  year  a  more  general  meeting  was  held 
in  London,  two  representatives  of  the  French  produc- 
tive societies  being  present.  Here  they  formulated  a 
general  program  for  the  proposed  international  alli- 
ance in  which,  as  Dr.  Miiller  points  out,  the  word  "  co- 
operation "  did  not  appear  once. 

"  In  the  eyes  of  these  men,"  adds  Dr.  Miiller,  "  a 
capitalist  enterprise  which  gave  its  workers  a  share 
in  the  profits  stood  cooperatively  higher  than  the  co- 
operative factories  of  the  English  Wholesale  Society. 
The  latter  was  a  horror  to  them ;  the  former  the  lofty 
object  of  their  admiration." 

At  about  this  time  Vansittart  Neale  died,  and  the 
leadership  of  this  movement  fell  to  Henry  Wolff,  an 
Englishman  who  had  lived  for  many  years  in  Germany 
and  was  interested  in  agricultural  cooperation  and  the 
Schulze-Delitzsch  banks,  but  who  understood  nothing 
of  the  consumers'  movement.     Neale,  Holyoake,  and 


70  consumers'  cooperation 

a  few  others  had  insisted  that  profit  sharing  should  be 
the  mark  of  approval  for  entrance  into  the  alliance. 
Wolff,  with  his  knowledge  of  German  organizations, 
realized  that  this  meant  the  exclusion  of  everything 
in  that  country.  From  this  point  of  view  even  the 
program  of  the  Christian  Socialists  seemed  absurdly 
narrow.  His  influence  led  to  the  door  being  opened 
to  any  person  or  organization  calling  himself  or  itself 
"  cooperative."  Furthermore,  the  Cooperative  Union 
was  now  invited  to  send  delegates  to  the  meetings. 

But  the  Cooperative  Union,  naturally,  refused  to 
participate  with  a  committee  of  private  persons  in 
organizing  a  federation  in  which  their  delegates  might 
be  outvoted  by  the  managers  of  a  gas  company  or  any 
other  private  enterprise  which  chose  to  call  their  Christ- 
mas presents  to  their  employees  "  profit  sharing." 
For  a  while  the  organizers  tried  to  go  on  without  the 
Union. 

But  this  attitude  on  the  part  of  the  organized  con- 
sumers of  Great  Britain  had  its  influence  on  the  Conti- 
nent. Individuals  in  plenty  came  forward,  eager  to 
join  what  promised  to  be  a  lively  debating  society,  but 
the  cooperative  societies  showed  no  such  inclination. 

Finally  the  conditions  of  the  Cooperative  Union 
were  agreed  to.  These  were  that  the  Union's  dele- 
gates should  constitute  the  sole  representatives  of  the 
British  cooperative  movement  in  the  federation.  The 
Union  also  demanded  equal  participation  in  the  prepa- 
rations for  convening  the  first  congress. 

On  August  19,  1895,  the  first  congress  of  the  Inter- 
national Cooperative  Alliance  was  convened  in  London, 
under  the  chairmanship  of  Earl  Grey,  later  Governor- 
General  of  Canada  and  until  his  recent  death  honorary 
president  of  the  Alliance. 

The  official  participation  and  support  of  the  British 


THE   INTERNATIONAL  7I 

Cooperative  Union  had  not  been  without  result,  for 
French,  Itahan,  Belgian,  Dutch,  Swiss,  and  Danish 
societies  sent  delegates.  The  German  societies  still 
held  aloof.  But  there  was  a  rather  conspicuous  ab- 
sence of  consumers'  societies.  Among  the  numerous 
private  individuals  present  was  the  Irishman  whose 
name  has  since  become  so  prominently  connected  with 
Irish  reform,  especially  in  agriculture,  Mr.  (now  Sir) 
Horace  Plunkett.  Luzzatti,  the  Italian  statesman, 
was  also  present  and  was  elected  a  member  of  the  per- 
manent committee. 

During  the  first  two  days  of  the  gathering  the  pro- 
ceedings ran  smoothly  enough,  but  on  the  third  day 
came  the  business  of  passing  resolutions  on  fundamen- 
tal principles  which  should  serve  as  a  guide  in  drafting 
a  constitution. 

Already  four  resolutions  had  been  passed  favoring 
profit  sharing.  And  now  the  old  irreconcilable  ele- 
ment, with  Holyoake  at  their  head,  demanded  that  it 
be  made  a  condition  of  membership.  Immediately  the 
meeting  burst  forth  into  wild  debate.  For  a  moment 
collapse  seemed  unavoidable.  But  here  some  of  Hol- 
yoake's  own  associates,  less  fanatical  than  himself, 
realizing  that  without  the  moral  support  of  the  Union 
and,  finally,  the  financial  support  of  the  Wholesale, 
there  would  be  no  international  federation,  went 
against  him,  and  he  lost  his  point.  Neither  profit 
sharing  nor  any  other  device  was  made  a  condition 
of  membership. 

Far  better  would  it  have  been  if  this  issue  had  been 
fought  out  to  the  bitter  end  and  a  split  had  been  the 
result.  In  a  spirit  of  compromise  no  principles  at  all 
were  laid  down  and  any  person  or  organization  might 
join,  to  retard  the  progress  of  the  movement  by  in- 
ternal dissension  for  another  ten  years  to  come,  cloud- 


^2  CONSUMERS     COOPERATION 

ing  an  intelligent  understanding  of  the  true  basis  of 
the  genuine  cooperative  movement.  To  this  day 
Holyoake,  then  the  chief  and  the  most  persistent  of 
this  group  of  muddled  reformers,  is  still  regarded  as 
the  historian  and  the  greatest  authority  on  coopera- 
tion, which,  in  fact,  he  never  understood.  His  writ- 
ings, recommended  to  students  of  the  subject,  can 
have  no  other  result  but  to  misguide  and  to  con- 
fuse. 

"  On  this  cardinal  point  of  cooperative  doctrine," 
comments  Dr.  Muller,  in  summing  up  the  results  of 
this  first  congress,  "  the  schism  remained  permanently 
defined;  in  fact,  through  the  International  Alliance 
it  became  a  problem  for  the  whole  cooperative  move- 
ment. It  lay  in  the  nature  of  the  matter  that  it  could 
not  long  march  under  one  banner  which,  as  Holyoake 
aptly  remarked,  bore  on  either  side  a  different  device. 
If  the  standard  set  up  in  London  were  regarded  from 
the  left,  one  read  *  cooperation  ' ;  if  from  the  right,  the 
word  *  profit  sharing '  was  visible." 

This  was,  unfortunately,  true.  The  International 
Cooperative  Alliance,  born  amid  the  mental  chaos  of 
its  organizers,  must  now  devote  its  energy  to  straight- 
ening its  own  crooked  back.  Had  it  been  able  to  start 
clear,  with  a  well-defined  program,  a  clear  understand- 
ing of  the  principles  and  aims  of  cooperation,  it  might 
have  turned  its  forces  toward  spreading  and  deepening 
the  international  movement.  On  the  other  hand,  it 
may  also  be  said  that  the  struggle  which  followed 
made  all  the  clearer  the  principles  which  have  since 
been  enunciated ;  that  they  stand  forth  as  the  result  of 
the  experience  of  the  movement,  rather  than  as  the 
formulated  theories  of  any  man,  or  set  of  men.  In 
fact,  it  may  be  said  that  what  now  may  be  defined  as 


THE   INTERNATIONAL  73 

true  cooperative  practice  and  theory  has  been  accepted 
by  Cooperators  in  spite  of  themselves. 

The  International  Cooperative  Alliance  was  begun 
under  the  auspices  of  conservative  reformers.  To-day 
it  stands  forth  as  intrinsically  the  most  revolutionary 
organization  in  the  world.  How  this  transition  was 
gradually  accomplished  will  be  shown  in  the  next  chap- 
ter. 


CHAPTER  VIII 

EVOLUTION    OF   THE   INTERNATIONAL   COOPERATIVE 
ALLIANCE 

As  before  remarked,  the  history  of  the  International 
Cooperative  Alliance  is  simply  a  record  of  a  virile, 
rapidly  developing  movement  gradually  disentangling 
itself  from  a  maze  of  false  doctrines,  in  which  its 
founders  had  attempted  to  enshroud  it.  Had  they 
been  able  they  would  have  fastened  an  orthodoxy 
on  the  organization  as  tyrannical  as  that  of  any 
church. 

The  next  few  congresses  following  the  first  need 
not  be  described  in  detail ;  there  is  a  similarity  between 
them  in  their  very  madness.  The  Owenites  at  their 
very  wildest  moments  never  proposed  schemes  more 
absurd  than  were  those  seriously  considered  at  the 
first  few  international  congresses  and  some  of  which 
had  already  been  adopted  by  national  conferences. 
As  an  illustration:  at  the  second  congress  of  the  Alli- 
ance, held  in  Paris,  in  1896,  two  of  the  most  prominent 
leaders  of  the  French  movement  endeavored  to  have 
engrafted  in  the  constitution  a  formula  by  which  the 
profits  of  all  cooperative  enterprises  must  be  divided, 
rather  resembling  a  recipe  for  some  chemical  con- 
coction. Thus,  the  net  profits  were  to  be  divided 
equally  in  five  parts :  one  part  should  go  to  talent,  one 
to  capital,  one  to  labor,  one  to  insurance,  and  one  to 
a  reserve  fund. 

At  this  gathering  another  element  made  its  first  ap- 

74 


INTERNATIONAL   COOPERATIVE   ALLIANCE  75 

pearance:  the  agricultural  selling  societies,  the  chief 
exponent  of  which  is  to-day  Sir  Horace  Plunkett. 
Wolff,  who  represented  this  element  then,  read  a  paper 
before  the  congress  on  agricultural  societies  in  which 
he  made  it  plain  that  he  considered  the  consumers' 
societies  the  logical  market  for  the  products  of  the 
agricultural  societies ;  that  it  was  the  duty  of  the 
former  to  patronize  the  latter,  as  it  had  been  their 
duty  to  patronize  the  self-governing  workshops. 

Little  need  be  said  about  the  rules,  or  constitution, 
which  were  adopted  at  this  second  congress ;  they  were 
not  made  binding.  No  set  of  rules  could  have  been 
framed  which  could  have  been  accepted  as  binding  by 
so  heterogeneous  a  collection  of  elements. 

An  imposing  central  committee  was  elected  at  this 
Paris  congress,  on  which  was  represented  practically 
every  country  of  the  world,  including  the  United 
States.  The  American  representative  was  probably 
typical  of  a  good  many  others ;  he  was  ^  N.  O.  Nelson, 
a  private  manufacturer  of  the  Middle  West  who  had 
instituted  profit  sharing  among  his  employees,  but  who 
was  not  then,  nor  has  he  been  since,  connected  with 
any  democratic,  spontaneous  cooperative  society. 

In  the  following  year,  1897,  the  third  international 
congress  was  held  at  Delft,  Holland.  It  was  practi- 
cally a  repetition  of  the  Paris  congress;  the  academic 
and  often  irrelevant  speeches  made  here  were  most  of 

^  In  reading  over  the  proofs  it  strikes  me  that  the  above  refer- 
ence to  Mr.  N.  O.  Nelson  does  him  an  injustice.  He  has  de- 
voted a  large  part  of  his  life  and  all  of  his  personal  fortune  to 
propagating  the  Cooperative  idea  in  this  country.  Some  years 
ago  he  established,  at  his  own  expense,  a  chain  of  stores  in  and 
around  New  Orleans,  about  which  he  hoped  to  develop  a  co- 
operative membership.  Upton  Sinclair  says  that  this  enterprise 
ruined  him  financially.  It  was  magnificent  idealism  —  but  not 
cooperation.  To  cooperate  one  must  work  together  with  his 
fellows.    A.  S. 


76  consumers'  cooperation 

them  uttered  by  private  individuals  who  represented 
nothing  but  their  own'opinions. 

Then  came  a  period  of  three  years  in  which  no  con- 
gress was  held ;  the  fourth  congress  convened  in  Paris, 
in  1900. 

But  during  this  interval  important  developments 
were  taking  place  in  the  cooperative  world.  The  Eng- 
lish Wholesale  Society  had  invited  the  German  Whole- 
sale Society  to  send  a  delegation  over  to  Manchester 
to  inspect  its  plants.  The  Germans  came  —  and  were 
astounded.  Then  came  similar  visiting  delegations 
from  Denmark,  Austria,  Belgium,  and  other  countries. 
In  1900  Dr.  Hans  Miiller  was  sent  by  the  Swiss  Co- 
operative Union  on  a  six  weeks'  tour  of  inspection  of 
the  British  cooperative  movement,  with  the  result  that 
he  became  an  ardent  champion  of  the  consumers  and 
was  one  of  the  first  to  help  deduce  the  working 
theories  on  which  the  modern  movement  is  based. 
During  this  period,  also,  the  two  British  wholesale 
societies,  the  English  and  the  Scottish,  together  with 
the  German  Wholesale,  became  members  of  the  Al- 
liance.    The  Swiss  Union  also  joined  in  a  body. 

Meanwhile  a  radical  change  had  taken  place  in  the 
attitude  of  the  political  Socialists  toward  cooperation. 
Lasalle  had  predicted  that  the  cooperative  societies 
would  never  acquire  any  social  significance.  But  he 
was  now  being  contradicted  by  actual  facts.  The  tre- 
mendous growth  and  financial  strength  of  the  English 
Wholesale  Society,  calmly  reporting  losses  or  gains  of 
millions  of  pounds  sterling  in  its  quarterly  balance 
sheets,  impressed  the  Socialists.  They  became  inter- 
ested. Nor  was  this  first  interest  quite  a  brotherly, 
or  a  sympathetic,  interest,  perhaps.  They  would  like 
to  annex  those  fat  surpluses.    Or,  if  they  could  not 


INTERNATIONAL   COOPERATIVE   ALLIANCE  y"] 

be  expropriated,  they  would  like  to  acquire  such  sur- 
pluses through  similar  means.  Thus  they  discovered 
an  affinity  between  political  Socialism  and  cooperation 
to  which,  fortunately,  the  Cooperators  were  blind. 

But  this  selfish  stage  passed ;  has  passed,  now.  In- 
dividual Socialists  began  entering  the  movement,  but 
if  their  motives  may  not  have  been  purely  for  cooper- 
ation in  the  beginning,  they  eventually  became  so. 
Most  of  them  began  to  realize  that  here  was  the  real 
economic  revolution  of  which  their  leaders  talked  so 
much. 

Thus  there  were  two  distinct  consumers'  movements 
in  France  during  the  latter  part  of  the  nineties;  one 
represented  by  the  pure  and  simple  Cooperators,  in- 
terested either  for  material  benefits  or  because  they 
beHeved  cooperation  alone  would  achieve  a  solution  of 
the  social  problems;  and  the  Socialist  consumers'  so- 
cieties, whose  members  either  thought  this  a  good 
method  by  which  money  could  be  raised  for  the  treas- 
ury of  the  political  party,  or  who  believed  political 
action  not  sufficient  in  itself.  Both  elements  joined 
the  Alliance.  Thus  the  original  founders  of  the  or- 
ganization, who  had  denounced  the  "  revolutionary  " 
Marxians,  were  now  obliged  to  receive  them  within  the 
fold  and  consort  with  them.  And  they  continued 
coming  in,  in  ever  greater  numbers,  doing  their  share 
toward  the  evolutionary  changes  which  were  taking 
place  within,  never  hesitating  to  make  themselves  and 
their  theories  of  the  "  class  struggle  "  heard.  It  was 
in  their  contact  with  this  Socialist  element  that  the 
consumers  began  acquiring  a  social  consciousness  of 
their  own. 

Not  least  important  was  the  publication  of  Beatrice 
Potter's    (Mrs.    Sidney    Webb)    widely    read    "  Co- 


78  consumers'  cooperation 

operative  Movement  in  Great  Britain,"  wherein  she 
literally  tore  to  shreds  the  theories  of  Neale,  Hughes, 
and  Holyoake. 

All  these  influences  together  began  making  them- 
selves felt  in  the  congress  of  1900. 

There  it  was  that  J.  C.  Gray,  Neale's  successor  as 
general  secretary  of  the  Cooperative  Union,  presented 
a  motion  for  the  abolition  of  individual  membership, 
except  in  the  case  of  such  countries  as  had  not  yet  de- 
veloped a  democratic  cooperative  movement.  Hol- 
yoake fought  this  move,  for  by  making  the  Alliance 
a  representative  body  such  as  he  would  be  little  heard. 
He  realized  that  once  the  organization  was  put  on  a 
representative  basis,  profit  sharing,  which  had  been 
hitherto  championed  almost  exclusively  by  gentlemen 
of  the  upper  classes,  and  not  by  delegates  of  organiza- 
tions, would  be  relegated  to  oblivion. 

Gray's  motion  was  carried  and  the  Alliance  became 
at  least  a  representative  body,  if  not  entirely  repre- 
sentative of  cooperation.  And,  as  Holyoake  rightly 
feared,  no  more  was  ever  heard  of  profit  sharing  at  the 
International  Alliance  congresses. 

The  fifth  congress,  in  1902,  was  held  in  Manchester, 
and  this  was  another  significant  event.  Here  every 
delegate  from  abroad  might  see  with  his  own  eyes 
what  the  consumers'  organization  had  accomplished. 
By  this  time  some  of  the  English  Wholesale's  plants 
ranked  as  the  biggest  of  their  kind  in  the  kingdom, 
even  in  the  whole  world.  After  this  congress  began 
appearing  a  great  number  of  pamphlets,  written  by  Co- 
operators  of  Continental  countries,  in  which  the  won- 
ders of  the  Wholesale  Society  were  described  and 
praised.  Not  the  least  enthusiastic  were  the  one  is- 
sued by  the  Socialist-Cooperative  delegate  from  Bel- 
gium, Victor  Serwy,  and  the  book  published  by  Hein- 


INTERNATIONAL   COOPERATIVE   ALLIANCE  79 

rich  Kauffman,  director  of  the  German  Wholesale. 
All  this  was  strong  propaganda  material,  good  adver- 
tising, from  the  consumers'  point  of  view.  Facts,  and 
not  theories,  it  must  be  pointed  out,  were  presented. 
People  were  impressed  by  the  concrete  results  of  the 
consumers'  activities,  as  against  the  mere  reams  of 
printed  matter,  the  results  of  the  activities  of  the 
theorists.  As  yet  there  was  no  conscious  revolution- 
ary spirit,  no  realization  that  the  old  order  must  go  to 
give  place  to  the  new.  That  spark  was  soon  to  be  ig- 
nited, but  the  full  flame  has  only  just  lately  been 
burning. 

As  a  result  of  the  democratization  of  the  rules  the 
Alliance  saw  its  one  hundred  and  twenty  individual 
members  reduced  to  ten.  But  on  the  other  hand  one 
hundred  and  twenty  new  organizations  joined. 

The  sixth  congress  was  convened  at  Budapest,  in 
1904,  and  in  spite  of  the  distance  from  the  cooperative 
centers  in  western  Europe,  the  attendance  was  the 
largest  which  had  yet  been  attained.  Great  Britain, 
France,  Germany,  and  Italy  were  as  well  represented 
as  ever,  while  Switzerland,  Denmark,  Holland,  Bel- 
gium, Austria,  and  even  the  Balkan  states  sent  strong 
contingents.  Altogether  there  were  about  two  hun- 
dred and  fifty  delegates  representing  actual  organiza- 
tions in  fourteen  countries,  though  the  majority  of 
these  were  from  the  Hungarian  societies.  For  the 
first  time  the  congress  of  the  Alliance  had  taken  on  a 
really  international  and  representative  character.  The 
assembly  did  represent  what  was  then  considered  the 
cooperative  movement  of  the  world. 

There  was  nothing  on  the  congress  agenda  of  a 
controversial  nature,  nothing  seemed  to  indicate  any- 
thing but  a  harmonious  series  of  sessions  in  which, 
for  the  first  time,  principles  of  a  constructive  charac- 


8o  consumers'  cooperation 

ter  might  be  enunciated,  if  not  adopted.  Nevertheless, 
it  must  be  remembered  that  in  spite  of  the  large  influx 
of  consumers'  societies  there  were  still  many  conflict- 
ing elements  in  the  membership.  There  were  the 
Schulze-Delitzsch  banking  societies  and  the  Reiffeisen 
credit  unions  of  Germany  and  Austria,  the  productive 
societies  of  England  and  France,  and  the  numerous 
agricultural  sales  societies  from  all  over  Europe. 

The  cause  of  the  explosion  which  was  nearly  to  dis- 
rupt the  Alliance  was  Dr.  Hans  Miiller,  who  was  then 
secretary  of  the  Swiss  Union  of  Distributive  Societies. 
He  was  scheduled  to  read  a  paper  on  "  The  Organiza- 
tion of  Distributive  Societies  in  Rural  and  Semi-rural 
Districts."  After  describing  the  consumers'  cooper- 
ative stores  in  the  villages  and  small  towns  of  Switzer- 
land, he  began  to  make  a  few  extemporaneous  elabora- 
tions of  his  point  of  view,  wherein  he  gave  his  idea  of 
a  comprehensive  and  consistent  policy  for  the  develop- 
ment of  the  movement.  He  emphasized  the  necessity 
of  arousing  a  consciousness  of  solidarity  among  the 
working  classes  as  consumers  and  of  impressing  them 
with  a  realization  that  the  object  of  cooperation  was 
something  more  than  the  cheapening  of  the  cost  of  liv- 
ing: that  it  was  the  elimination  altogether  of  private 
profit,  that  its  mission  was  to  do  away  with  economic 
tribute,  which  pressed  so  heavily  on  the  mass  of  the 
population  under  the  present  system.  "  Finally,"  he 
concluded,  "  cooperation  is  an  economic  and  social 
movement  for  liberty  which,  by  means  of  the  organized 
building  up  of  a  new  order  of  the  economic  and  social 
conditions  on  which  our  existence  depends,  aims  at  ob- 
taining, both  for  the  individual  and  the  people  at  large, 
a  greater  amount  of  independence.  Therefore,  who- 
ever sincerely  desires  to  promote  the  cooperative  move- 
ment in  any  respect  whatever  must  never  forget  to 


INTERNATIONAL   COOPERATIVE   ALLIANCE  8 1 

banish  the  old  state  of  dependency  and  to  be  most  care- 
ful never  to  replace  it  by  any  similar  institution." 

Surely  no  Socialist  agitator,  which  Dr.  Miiller  cer- 
tainly was  not,  ever  uttered  words  more  fundamentally 
revolutionary  than  the  calm,  carefully  thought  out 
statement  of  this  program. 

Naturally,  the  Socialists  present  were  in  high  glee, 
and  started  the  applause.  There  came  a  pause,  as 
though  the  majority  of  the  assemblage  were  thinking 
over  the  words  of  the  speaker.  And  then,  finally,  the 
inevitable  opposition  flamed  forth. 

Dr.  H.  Criiger,  representing  the  German  Union  of 
Schulze-Delitzsch  societies,  sprang  to  his  feet  and  said 
—  just  what  might  have  been  expected  of  him. 

"  I  must  beg  to  be  allowed  to  state,"  he  cried,  "  on 
behalf  of  the  distributive  societies  of  the  General  Co- 
operative Union  in  Germany,  with  which  I  am  con- 
nected, that  they  do  not  by  any  means  subscribe  to  the 
principles  set  up  that  the  task  and  object  of  cooperation 
is  to  organize  consumers  wholesale  in  avowed  oppo- 
sition to  what  is  called  the  capitalist  trading  system 
now  established.  .  .  .  We  do  not  look  upon  the  dis- 
tributive societies  as  a  means  of  replacing  the  existing 
order  of  things.  .  .  .  Cooperation  has  a  large  number 
of  opponents  arrayed  against  it  as  it  is,  and  we  can 
hardly  hold  it  to  be  expedient  gratuitously  still  more 
to  increase  the  number  of  its  foes  by  the  adoption  of 
so  visionary  a  program  as  in  my  opinion  is  that  sug- 
gested. .  .  .  Our  desire  is  that  cooperation  should 
take  its  proper  place  in  national  trade." 

These  remarks  were  quickly  supported  by  the  dele- 
gate from  the  German  Reiffeisen  credit  unions.  The 
middle  classes  must  be  maintained,  he  said. 

"  And  accordingly,"  he  added,  "we  avoid  carrying 
cooperative  practices  to  extreme  lengths  by  discourag- 


82  consumers'  cooperation 

ing  the  formation  of  societies  which  must  almost  neces- 
sarily prejudice  the  interests  of  the  middle  class  and 
possibly  extinguish  it  altogether,  at  any  rate,  until  we 
are  compelled  to  do  so  by  necessity.  Thus  we  only 
act  in  the  true  spirit  of  Reififeisen  cooperation,  for  in 
our  organization  we  stand  committed  to  the  exercise  of 
public  spirit  in  the  sense  of  Christian  love  of  our  neigh- 
bors." 

Then  came  the  turn  of  those  who  supported  Dr. 
Miiller:  Mrs.  Steinbach,  representing  the  Hamburg 
organization,  Helies,  representing  French  consumers' 
societies,  and,  finally,  most  significant  of  all,  J.  C. 
Gray,  general  secretary  of  the  British  Cooperative 
Union,  who  declared  there  must  be  no  limit  set  to  the 
expansion  of  consumers'  cooperation,  whatever  the 
result  might  be  to  existing  trade  interests. 

In  replying  to  his  critics.  Dr.  Muller  again  elab- 
orated his  theme,  pointing  out  that  Consumers'  Co- 
operation was  diametrically  opposed  to  private-trading 
enterprises;  that  it  was  by  nature  anti-capitalistic. 
This  was,  indeed,  the  point  he  emphasized;  that  co- 
operation was  essentially  revolutionary,  whose  aim 
was  the  destruction  of  the  present  industrial  system, 
not  by  violence,  but  by  a  general  replacement  with  co- 
operative enterprise. 

As  Dr.  Criiger  later  wrote  in  the  official  organ  of 
his  organization,  the  debate  closed  with  a  "  victory  for 
the  advocates  of  cooperative  Socialism." 

This  time  there  was  a  split  in  the  Alliance.  The 
great  majority  of  the  agricultural  societies  withdrew, 
though  they  had  also  the  reason  that  a  resolution  was 
passed  by  the  assemblage  deprecating  state  aid  in  co- 
operative enterprise,  which  they,  like  all  farmers'  or- 
ganizations, sought  assiduously.  Three  years  later 
they  formed  an  international  alliance  of  their  own. 


INTERNATIONAL    COOPERATIVE   ALLIANCE  83 

The  German  Schulze-Delitzsch  societies,  naturally,  also 
withdrew.  All  the  conservative  elements,  in  fact,  hur- 
ried to  get  out  of  such  revolutionary  company. 

At  first  it  seemed  that  the  split  was  to  have  serious 
results;  the  Schulze-Delitzsch  societies  alone,  in  Aus- 
tria and  Germany,  numbered  twenty-three. 

But  the  gap  which  these  secessions  made  was  more 
than  filled  by  the  new  societies  w-hich  came  in,  most 
of  them  consumers'  organizations  which  had  held  aloof 
on  account  of  the  conservative  character  of  the  Alli- 
ance. As  compared  to  the  two  hundred  and  fifty  dele- 
gates at  Budapest,  there  were  nearly  four  hundred  at 
the  next  congress,  held  in  Cremona,  three  years  later. 
To  show  the  large  influx  of  Socialist-Cooperators 
which  had  taken  place,  it  is  worth  mentioning  that  at 
this  congress,  in  1907,  there  was  a  decided  effort  made 
to  pass  a  resolution  declaring  for  the  "  class  struggle," 
etc.,  but  this  was  decidedly  defeated.  The  Alliance 
was  not  going  to  have  its  revolutionary  character  fixed 
for  it  by  any  school  of  theorists. 

Luzzatti  was  in  the  chair  at  the  time  this  effort 
was  made. 

"If  you  wish  your  societies  to  enter  our  Alliance," 
he  said  to  one  of  the  Socialists,  "  we  will  throw  the 
doors  wide  open  to  receive  you,  but  if  you  wish  to 
compel  us  to  abandon  our  principles  and  pay  a  fright- 
ened homage  to  yours,  you  would  despise  us  and  we 
would  despise  ourselves  for  so  doing.  .  .  .  Hitherto 
your  masters;  the  Socialists,  have  fought  cooperation. 
What  contempt  the  leaders  of  Socialism  displayed  for 
cooperation!  Our  leaders  withstood  the  attack,  de- 
claring that  they  were  convinced  that  cooperation  sup- 
plied a  practical  formula  for  the  solution  of  the  social 
question  and  the  questions  affecting  the  working 
classes.     To-day  Socialism  has  made  peace  with  co- 


84  consumers'  cooperation 

operation,  and  it  is  lending  to  it  the  impulse  of  youth- 
ful energies  of  which  I  am  in  no  wise  afraid." 

It  was  at  this  same  meeting  that  Dr.  Miiller  offered 
a  resolution  suggesting  that  an  International  Whole- 
sale Society  be  formed.  Those  who  were  present  say 
Luzzatti  paused,  his  eyes  lighted  up ;  then,  dramatically 
raising  his  hand,  he  said : 

"  Dr.  Miiller  proposes  to  the  assembly  a  great  idea; 
that  of  opposing  to  the  great  trusts,  the  Rockefellers 
of  the  world,  a  world-wide  cooperative  alliance  which 
shall  become  so  powerful  as  to  crush  the  trusts." 

This  end,  voiced  by  one  of  the  conservative  leaders 
of  the  international  cooperative  movement,  could 
surely  not  be  stated  in  more  definite  terms.  No  less 
significant  and  definite  were  the  words  with  which 
Earl  Grey  who,  it  will  be  remembered,  opened  the  first 
congress,  in  London,  opened  the  ninth  congress  of  the 
Alliance,  in  Glasgow,  in  August,  191 3  : 

"  And  now  we  meet  in  our  ninth  congress,  fortified 
and  encouraged  by  our  past  experience  and  conscious 
that  it  is  in  our  power,  if  we  are  only  sufficiently  in 
earnest,  to  secure  the  triumphant  realization  of  a  future 
international  cooperative  commonwealth  which  we 
believe  will  one  day  be  coequal  and  coextensive  with 
the  whole  civilized  world.  The  remarkable  growth 
of  the  cooperative  movement  in  Germany,  Great 
Britain,  Denmark,  Finland,  Ireland,  and  elsewhere, 
since  the  day  when  we  laid  the  foundation  stone 
of  this  great  alliance,  justifies  our  confident  expecta- 
tion that  the  day  of  a  new  social  order  is  at  hand." 

Such  was  the  spirit  which  animated  the  movement 
before  the  recent  great  war.  What  has  happened  in 
the  movement  since  then,  in  a  material  sense,  has  had 
a  tremendous  influence  in  strengthening  that  spirit,  not 
only  among  leaders,  but  throughout  the  rank  and  file. 


CHAPTER  IX 

GROWTH 

The  real  advance  of  the  cooperative  movement  began 
in  the  sixties,  with  the  federation  of  the  local  societies 
into  the  English  Wholesale  Society.  What  had  oc- 
curred before  then,  though  very  important,  was  really 
nothing  more  than  the  mobilization  of  sufficient  forces 
to  make  a  forward  move.  There  were  then  probably 
less  than  a  hundred  thousand  local  society  members 
throughout  all  of  Great  Britain,  of  which  less  than 
a  fifth  were  willing  or  able  to  support  the  new  enter- 
prise. 

We  have  already  described  the  circumstances  under 
which  the  Wholesale  began  manufacturing,  in  the  early 
seventies :  first  biscuits ;  then,  some  months  later,  boots 
and  shoes.  Both  these  ventures  were  fairly  success- 
ful. But  cooperative  production  did  not  thencefor- 
ward leap  ahead  with  bounds.  The  agitation  of  the 
Christian  Socialists  undoubtedly  had  something  to  do 
with  this  slow  development,  in  that  it  undermined  the 
faith  of  even  some  of  the  Wholesale  officials  in  this 
system  of  production.  But  there  were  other  reasons 
as  well. 

Each  step  had  to  be  carefully  considered,  for  the 
movement  was  pioneering  over  uncharted  regions. 
Outwardly  a  cooperative  industry  may  present  much 
the  same  features  as  any  private  enterprise,  but  this 
similarity  goes  no  further. 

As  the  management  committee  was  soon  to  learn, 
it  could  not  simply  hire  men  who  had  been  trained  in 

8s 


86  consumers'  cooperation 

private  business  and  set  them  to  work  on  a  salary.  In 
the  first  place,  the  grade  of  abiHty  required  would  have 
demanded  larger  remuneration  than  the  movement 
could  then  afford  to  pay;  no  ordinary  business  man 
would  pilot  a  big  enterprise  through  its  initial  diffi- 
culties with  no  prospects  of  big  reward.  At  least,  ex- 
perience does  not  show  that  it  can  be  done.  A  co- 
operative enterprise  has  many  difficulties  to  face  in 
the  beginning,  but  they  are  of  a  different  character 
from  those  which  the  private  business  has  to  encounter. 
I  believe  it  was  Heinrich  Kaufmann,  director  of  the 
German  Wholesale  Society,  who  said  that  the  only 
training  of  any  value  to  cooperative  industry  is  that 
which  has  been  acquired  in  cooperative  industry.  At 
any  rate,  one  has  only  to  look  through  the  biographical 
index  in  back  of  the  "  History  of  the  C.  W.  S.,"  by 
Mr.  Redfern,  a  sort  of  a  "  Who's  Who  "  of  the  Eng- 
lish movement,  to  realize  that  English  cooperation  has 
trained  its  own  executive  talent.  On  the  other  hand, 
these  men  seem  likewise  unfitted  for  competitive  busi- 
ness. The  directing  heads  of  the  cooperative  enter- 
prises seem  never  to  be  tempted  to  go  into  business  for 
themselves,  or  to  accept  employment  under  private 
masters.  Certainly  it  is  not  their  remuneration  which 
holds  them  loyal  to  the  movement;  William  Maxwell, 
for  over  twenty-five  years  president  of  the  Scottish 
Wholesale,  never  drew  a  salary  over  thirty-eight  dol- 
lars a  week,  and  twenty-five  dollars  a  week  is  a  pretty 
high  average  for  the  managers  of  the  bigger  local  en- 
terprises, some  of  which  do  a  yearly  business  of  many 
millions.  Executive  talent  of  this  magnitude  draws 
its  ten  and  fifteen  thousand  dollars  a  year  in  private 
business.  But  these  men  seem  never  to  feel  the  temp- 
tation. There  is,  undoubtedly,  a  stimulus  to  public, 
or  social,  service  of  this  sort  not  unlike  the  stimulus 


GROWTH  87 

of  the  stage,  which  easily  takes  the  place  of  greed  for 
profit.  And  finally,  it  would  be  doubtful  whether  a 
cooperative  executive  would  be  of  much  use  in  the  pri- 
vate business  world.  Advertising  and  salesmanship 
would  be  unknown  arts  to  him.  Perhaps  it  is  as  Mrs. 
Webb  has  suggested :  that  the  high  salaries  in  private 
business  are  not  so  much  earned  by  pure  executive 
ability  and  good  judgment  as  by  "  smartness,"  the 
ability  to  steal  a  march  on  a  rival  or  to  gauge  the  mar- 
gin of  profit  a  certain  market  will  stand. 

Thus  the  progress  of  cooperative  manufacturing  in 
the  beginning  was  limited  by  the  supply  of  experienced 
men  to  direct.  John  T.  W.  Mitchell,  chairman  of  the 
management  committee  from  1874  until  1895,  a  Roch- 
dale flannel  weaver  originally,  was  one  of  the  first. 
Big,  bluff,  direct,  not  by  any  means  an  orator,  not  what 
one  would  call  a  popular  leader,  he  certainly  developed 
rare  executive  ability  and  business  judgment.  His 
successor,  John  Shillito,  rose  from  a  simple  hand  in  a 
carpet  factory  and  showed  an  equal  capacity  for  guid- 
ing the  wheels  of  million-dollar  plants.  William  Max- 
well, already  referred  to,  was  at  first  a  coach  builder 
and  rose  to  the  head  of  the  Scottish  Wholesale  through 
his  local-management  committee.  Thus  these  captains 
of  cooperative  industry  rose  silently  from  the  rank 
and  file  and  made  good.  So  it  was,  too,  with  the  lesser 
heads;  factory  superintendents,  shipping  managers, 
chief  clerks,  etc.  In  the  early  years  cooperative  enter- 
prise was  largely  a  training  school  for  such  men,  and 
the  actual  enterprises  could  not  grow  any  faster  than 
the  capacity  of  the  men  in  charge.  Indeed,  things  did 
not  always  run  smoothly;  the  losses  were  heavy  in 
those  days,  and  experience  had  to  be  paid  for,  in  hard 
cash,  as  the  training  of  good  gunners  entails  heavy 
bills  for  ammunition. 


8fi  CONSUMERS*    COOPERATION 

The  English  Wholesale  had  begun  manufacturing 
biscuits  for  the  very  practical  reason  that  the  demand 
justified  it.  The  Scottish  Wholesale,  founded  in  1868, 
did  not  begin  manufacturing  till  1881,  and  then,  to  the 
credit  of  the  Scotch  be  it  said,  it  was  sentiment,  rather 
than  plain  business,  which  decided  with  which  com- 
modity a  beginning  should  be  made.  Shirt  making 
was  then  one  of  the  worst  trades  for  sweating,  and  the 
Scottish  delegates,  reluctant  to  handle  such  goods,  dis- 
cussed the  possibility  of  improving  labor  conditions  by 
establishing  a  model  shirt  factory  under  union  condi- 
tions. Business  sense  and  sentiment  came  to  an  agree- 
ment, and  presently  Scottish  Cooperators  were  able  to 
wear  shirts  made  in  a  factory  where  the  workers  got 
a  living  wage  and  worked  only  forty-eight  hours  a 
week. 

Save  for  a  very  small  beginning  in  manufacturing 
soap,  made  in  1874,  the  English  Wholesale  initiated  no 
notable  ventures  in  production  during  the  rest  of  the 
decade.  The  next  striking  achievement  was  to  be  ac- 
complished by  the  Scotch. 

In  1885  the  delegates  to  the  quarterly  meeting  of 
the  Scottish  Wholesale  were  presented  by  their  man- 
agement committee  with  a  scheme  which  fairly  took 
their  breath  away:  that  the  society  should  acquire 
about  fifteen  acres  of  land  in  the  outskirts  of  the  city 
of  Glasgow,  where  land  was  comparatively  cheap,  and 
there  build  an  industrial  center,  comprising  not  only 
factories  of  all  descriptions,  but  dwellings  for  the 
workers,  schools  for  their  children,  gardens,  etc.  The 
cost  was  estimated  at  about  four  hundred  thousand 
dollars,  though  eventually  much  more  than  that  was 
spent  before  a  beginning  was  made. 

To  the  cooperative  world  this  must  have  seemed  a 
Utopian  vision,  and  yet  the  "  canny  "  Scotchmen  listen- 


GROWTH  89 

ing  to  this  proposal  did  not  vote  it  down.  Says  Wil- 
liam Maxwell,  in  his  "  History  of  Cooperation  in  Scot- 
land," "  I  think  I  hear  to-day  the  warning  of  some 
old  veterans  who,  when  they  had  heard  all  the  sugges- 
tions, simply  said :  *  Ca'  canny,  ma  man ;  it's  no  yer  ain 
siller  ye're  spendin'.'  " 

Eventually  twelve  acres  were  acquired  at  Shieldhall, 
at  fifteen  hundred  dollars  an  acre,  and  there  was 
founded  the  main  productive  center  of  the  movement 
in  Scotland. 

"  Factory  followed  factory,"  says  Mr.  Maxwell ; 
"  each  new  building  was  fitted  with  modern  machinery. 
.  .  .  Some  idea  of  the  rapidity  of  the  development 
may  be  gathered  from  the  following  statement :  boots 
and  shoes,  tanning  and  currying,  artisans'  clothing, 
cabinetmaking  and  preserving,  begun  in  1890;  confec- 
tionery, mantles,  tobacco,  in  189 1 ;  coffee  essence, 
printing,  chemicals,  engineering,  in  1892;  sausages, 
tinware,  pickles,  and  boots  and  shoes,  in  1893." 

By  this  time,  of  course,  the  English  had  also  added 
many  new  enterprises  to  their  initial  efiforts.  But  be- 
fore enumerating  these,  it  may  be  of  interest  to  note 
how  the  English  Wholesale  solved  certain  problems 
of  transportation. 

In  the  effort  to  reach  out  toward  original  sources  of 
supply  and  to  eliminate  big  middlemen's  profits,  the 
Society  had  been  establishing  purchasing  agencies  in 
various  foreign  countries :  in  New  York,  for  the  pur- 
chase of  American  agricultural  produce,  such  as  cheese, 
grain ;  in  Denmark,  for  the  purchase  of  butter,  bacon, 
and  eggs;  in  Greece,  for  the  purchase  of  dried  fruits, 
etc.  These  agencies  gradually  developed  a  large  vol- 
ume of  trade  and  made  big  shipments  at  a  time  to 
Manchester,  so  big  that  it  soon  became  necessary  to 
charter  vessels.     The  next  step  was  to  acquire  owner- 


90  CONSUMERS     COOPERATION 

ship,  and  in  1876  the  steamship  Plover  was  purchased 
as  the  first  of  the  C.  W.  S.  fleet. 

But  —  the  Wholesale  carried  freight  only  one  way; 
it  had  nothing  to  export.  Empty  holds  on  the  return 
passages  would  mean  heavy  losses.  Here  it  was  found 
necessary  to  make  one  of  the  very  few  departures  from 
what  has  been  a  persistent  and  continuous  practice  with 
all  wholesale  societies  —  never  to  deal  with  private 
trade.  Thus,  when  outward  bound,  the  Plover  took 
general  cargo,  engaging  in  a  general  freight  busi- 
ness. 

This  brought  the  C.  W.  S.  into  open  competition 
with  private  transportation  companies. 

In  1883  the  Wholesale  put  a  steamship  into  the  trade 
between  England  and  Hamburg,  on  account  of  its  own 
increasing  shipments  from  Germany,  and  also  because 
the  private  companies  were  needlessly  raising  freight 
rates.  Immediately  the  private  transportation  compa- 
nies began  cutting  outward  freight  rates  against  the 
C.  W.  S. 

The  Wholesale  accepted  the  challenge,  at  once 
bought  another  steamer  for  forty  thousand  dollars, 
and  entered  into  the  rate  war.  The  steamship  compa- 
nies had  assumed  a  very  dictatorial  tone  in  their  cor- 
respondence with  the  Wholesale,  and  this  had  roused 
something  like  a  class  feeling  on  the  part  of  the  dele- 
gates to  the  quarterly  meeting  who  approved  the  de- 
cision to  fight. 

"  A  certain  big  company  commands  us  not  to  bring 
yeast  from  Hamburg  to  Hull  on  Tuesdays,"  reported 
the  committee. 

"  We'll  show  these  plutocrats  we  can  fight  them 
with  their  own  weapons,"  was  the  general  tenor  of 
the  discussion. 

The  struggle  between  the  private  companies  and 


GROWTH  91 

the  Wholesale  continued  until  1885,  the  loss  to  the 
latter  sometimes  amounting  to  five  thousand  dollars  a 
quarter.  But  the  delegates  accepted  these  losses  cheer- 
fully; they  playfully  referred  to  the  shipping  depart- 
ment as  the  "  picturesque  department." 

Then,  finally,  there  came  an  offer  from  the  private 
companies  to  compromise;  the  agent  of  the  railroad 
company  came  as  mediator.  It  was  the  first  struggle 
against  big  capital  in  which  the  Wholesale  became 
engaged,  and,  as  in  subsequent  affairs,  it  came  out 
victor. 

The  fleet  of  the  Wholesale  expanded,  but  was  al- 
ways confined  to  the  Channel  trade.  The  question  of 
outward  cargoes  has,  after  all,  proved  the  limitation 
to  a  really  extensive  fleet  of  carriers,  for  there  is  a 
strong  prejudice  against  the  carrying  of  private 
freights.  But  recent  developments  on  the  Continent 
in  cooperative  trade,  especially  in  Russia,  may  soon 
remove  this  barrier. 

The  fate  of  a  great  number  of  the  old  self-govern- 
ing workshops,  which  had  enjoyed  temporary  success 
through  the  support  of  the  consumers'  societies,  is 
illustrated  in  the  circumstances  under  which  the 
Wholesale  began  its  next  big  manufacturing  venture. 

A  self-governing  workshop  had  been  founded  in 
Batley;  it  was  a  woolen  mill.  The  Wholesale  bank 
had  advanced  the  owners  money>  When  this  establish- 
ment went  into  bankruptcy,  in  1883,  the  Wholesale 
was  the  chief  creditor,  to  the  extent  of  thirty-seven 
thousand  dollars.  Arranging  with  the  other  creditors, 
the  Wholesale  took  over  the  plant;  then,  four  years 
later,  began  operating  it.  To  make  the  necessary  con- 
necting link  between  the  woolen  goods  turned  out  by 
this  factory  and  the  suit  of  clothes  ready  for  the  pur- 
chasing Cooperator,  a  tailoring  department  was  estab- 


92  CONSUMERS     COOPERATION 

lished,  and  so  the  Wholesale  began  the  manufacture  of 
clothing. 

It  will  be  remembered  that  in  the  very  early  days 
quite  a  number  of  cooperative  societies  began  with 
grinding  wheat  into  flour,  as  in  the  case  of  the  Hull 
society.  As  the  old  picturesque  water-driven  mill 
gave  way  to  steam-driven  machinery  and  milling  plants 
became  more  expensive,  such  ventures  became  fewer. 
Invariably,  in  England  and  Scotland,  at  least,  societies 
began  with  foodstuffs.  But  as  they  prospered  and  de- 
veloped, as  the  Rochdale  Society  had  done,  many  of 
them  took  up  flour  milling  on  a  modern  scale,  or  a 
number  of  societies  in  one  district  would  join  together 
for  this  specific  purpose.  In  fact,  this  the  Rochdale 
Society  had  done,  with  several  of  its  neighbors.  For 
this  reason  the  Wholesale  Society  refrained  from  flour 
milling;  it  did  not  wish  to  compete  with  its  own  con- 
stituent members. 

Nothing  so  well  illustrates  the  tendency  in  modem 
industry  toward  centralization  as  the  circumstances 
under  which  the  Wholesale  Society  was  forced  to 
change  this  policy. 

New  machinery  for  flour  milling,  as  in  all  other 
lines  of  industry,  was  constantly  being  invented,  most 
notable  being  the  steel  rollers.  These  modern  innova- 
tions were  being  brought  into  use,  in  the  United 
States  and  Hungary,  in  the  form  of  huge,  costly  plants. 
With  these  gigantic  enterprises  the  local  consumers* 
societies  could  not  compete,  not  because  the  capital 
was  lacking,  but  because  such  huge  plants  must  neces- 
sarily have  a  larger  output  than  could  be  absorbed  by 
one  locality.  Furthermore,  these  same  conditions  were 
making  it  more  and  more  compulsory  for  mills  to  be 
near  water  transportation,  on  account  of  the  bulky  na- 
ture of  the  material  handled. 


GROWTH  93 

As  this  situation  developed  it  came  to  be  recognized 
that  the  Wholesale  was  logically  most  fitted  for  an 
enterprise  of  such  broad  scope.  And  so  it  began  tak- 
ing over  some  of  the  mills  of  the  local  societies,  en- 
larging and  modernizing  them  and  establishing  new 
mills. 

This  step  was  finally  approved  in  the  late  eighties. 
In  1889  the  Wholesale  began  leisurely  to  build  its  first 
big  flour  mill  in  Newcastle,  at  a  cost  of  six  hundred 
thousand  dollars,  when  it  suddenly  became  known  that 
a  flour  trust  was  about  to  be  formed  in  Great  Britain. 
The  promoters  had,  in  fact,  approached  several  of  the 
local  cooperative  societies  owning  mills  of  their  own 
and  offered  to  take  them  in,  apparently  densely  igno- 
rant of  the  basis  on  which  they  were  conducted.  Thus 
warned,  the  Wholesale  pushed  the  building  of  its  big 
mill  to  completion,  and  in  1891  it  was  inaugurated 
and  began  grinding  flour  for  English  Cooperators. 

For  some  years  this  enterprise,  one  of  the  biggest 
of  its  kind  in  the  country,  was  run  at  a  loss,  on  account 
of  conditions  in  the  wheat  market.  The  deficit  finally 
reached  the  round  sum  of  one  hundred  thousand  dol- 
lars. Eventually  the  corner  was  turned  and  more  and 
bigger  mills  were  built.  The  Chancelot  Mill,  estab- 
lished in  1909,  by  the  Scottish  Wholesale  Society,  is 
said  to  be  the  biggest  and  best  equipped  flour  mill  in 
the  world. 

In  1895  the  English  Wholesale  Society  opened  big 
soap  works. 

Which  recalls  an  earlier  episode  involving  soap,  ex- 
perienced by  the  Scottish  Wholesale. 

A  large  soap  manufacturer,  whose  brand,  the  fa- 
mous "  Sunlight,"  known  all  over  the  Continent  in 
recent  years,  was  even  then  in  universal  demand  among 
the  working  classes,  had  fixed  the  retail  price  of  his 


94  CONSUMERS     COOPERATION 

product,  as  manufacturers  often  do.  The  Scottish 
Wholesale  accepted  this  condition  and  it  was  univer- 
sally adhered  to  by  the  local  societies.  Then  some 
private  traders,  ever  watchful  where  they  might  in- 
jure their  cooperative  rivals,  pointed  out  that  the  quar- 
terly rebates,  or  "  dividends,"  really  amounted  to  a  re- 
duction in  price.  The  Sunlight  Company  immediately 
took  the  matter  up  with  the  Wholesale  and  insisted  that 
the  cooperative  societies  must  not  grant  rebates  on  Sun- 
light soap.  This  was,  manifestly,  impossible  from  a 
bookkeeping  point  of  view  alone,  but  the  Wholesale  So- 
ciety simply  made  the  curt  reply  that  the  Sunlight  Com- 
pany should  not  meddle  with  the  Wholesale's  internal 
affairs.     But  Sunlight  insisted. 

Whereupon  the  Wholesale  closed  its  account,  ap- 
pealed to  all  the  local  societies  to  do  the  same  and,  for 
the  time  being,  procured  its  soap  elsewhere. 

The  local  societies  responded  loyally,  some  of  them 
hurling  the  Sunlight  posters  into  the  street.  In  the  co- 
operative world  the  boycott  was  pretty  general. 
Within  a  week  the  Sunlight  man  reconsidered  his  pre- 
vious decision  and  offered  to  come  to  terms.  But  it 
was  then  too  late.  Steps  had  already  been  taken  to- 
ward opening  up  cooperative  soap  works.  And  this 
was  eventually  done. 

The  English  Wholesale  soap  works  began  with  an 
output  of  seventy-two  tons  a  week,  in  1895 ;  by  1906 
this  had  increased  to  two  hundred  and  sixty-five  tons. 
Then,  for  a  while,  the  increase  slackened. 

In  that  latter  year  it  was  suddenly  announced  that 
twenty  soap  manufacturers  in  Great  Britain,  con- 
trolling a  capital  of  sixty  million  dollars,  had  come 
to  a  "  working  agreement." 

In  that  same  week  in  which  this  announcement  was 
made  the  demand  for  cooperative  soap  rose  from  three 


GROWTH  95 

hundred  tons  to  six  hundred  and  sixty  tons.  The  co- 
operative works  put  on  three  shifts,  worked  its  machin- 
ery day  and  night,  and  still  could  not  supply  the  call. 
Extensive  enlargements  were  made  as  hurriedly  as  pos- 
sible. Obviously  the  outside  public  recognized  the  co- 
operative movement  as  an  excellent  weapon  to  use  in 
"  trust  busting." 

Private  business  was  highly  enraged  at  this  result, 
as  may  be  judged  from  the  following  quotation  from 
an  editorial  in  the  Grocer,  a  trade  journal : 

"  This  diversion  of  the  soap  trade  from  ordinary 
channels  will  be  regretted  by  all  interested  in  the  suc- 
cess of  private  trade  .  .  .  the  soap  manufacturers 
concerned  will  find  it  difficult  to  recover  the  trade  they 
have  lost  and  which  the  Cooperative  Wholesale  So- 
ciety has  gained." 

The  Grocer  was  quite  right;  the  private  manufac- 
turers never  did  regain  this  lost  trade,  even  though  the 
"  working  agreement "  was  called  off.  To-day  the 
C.  W.  S.  soap  works,  with  their  tallow-collecting  sta- 
tions in  Australia,  their  copra-collecting  stations  in  the 
Fiji  Islands,  and  their  palm-oil  plantations  in  West 
Africa,  are  big  enough  to  meet  the  biggest  private  en- 
terprise in  open  competition,  without  asking  favors. 

In  revenge  for  the  injury  suffered,  the  soap  manu- 
facturers, led  by  Levering  Brothers,  made  a  determined 
attack  on  the  cooperative  movement  through  the  law 
courts.  Charging  that  cooperative  brands  of  soap 
were  substituted  for  theirs  when  the  latter  were  called 
for,  thirty  suits  were  instituted  against  as  many  local 
cooperative  societies.  It  was  maintained  that  in  the 
hurry  and  confusion  of  a  Saturday  night's  trading 
such  substitutions  were  bound  to  occur,  even  uncon- 
sciously, and  the  plaintiffs  pleaded  that  the  defendants 
should  be  made  to  carry  their  brands,  in  case  they  were 


96  CONSUMERS*    COOPERATION 

asked  for;  at  least,  this  was  the  condition  on  which 
they  were  willing  to  compromise  the  suits. 

The  Wholesale  Society  took  over  the  defense. 
First,  it  agreed  to  announce  throughout  the  move- 
ment what  societies  did  not  carry  private  brands  of 
soap.  The  plaintiffs  were  not  satisfied;  all  the  local 
societies  should  be  made  to  carry  their  brands. 

The  judge  before  whom  the  test  case  was  tried  de- 
clared the  demands  of  the  manufacturers  ridiculous. 
He  decided  against  them.  The  case  was  appealed,  and 
the  appeal  was  lost.  And  then  the  Wholesale  took  a 
final  step;  it  refused  henceforth  to  carry  any  private 
brands  of  soap  at  all,  and  supplied  its  constituents  with 
cooperative  soap  only. 

The  above  instances  are  rather  typical  of  this  "  class 
struggle  "  in  the  economic  field,  which  has  been  ever 
since  carried  on  between  capitalism  and  cooperation. 
As  we  shall  have  occasion  to  note,  later,  this  struggle 
seems  to  have  been  more  acute  on  the  Continent;  at 
least,  it  has  there  presented  itself  in  a  more  picturesque 
aspect. 

The  Scotch  Cooperators  had  had  a  very  violent  fight 
with  the  private  interests.  In  1888  the  latter  organ- 
ized the  Scottish  Traders'  Defense  Association  and  for 
almost  ten  years  waged  bitter  warfare  against  the  co- 
operative societies.  At  first  they  confined  themselves 
to  printed  propaganda,  but  as  the  cooperative  move- 
ment still  continued  growing,  certain  elements  became 
desperate  and  resolved  to  resort  to  more  violent  means. 
To  meet  their  attacks,  the  Cooperators  organized  a 
"  Vigilance  Committee,"  toward  whose  support  the 
Wholesale  and  local  societies  contributed  a  fighting 
fund  amounting  to  over  one  hundred  thousand  dollars. 

Manifestoes  were  issued  by  both  sides;  declarations 
of  war.     The  capitalists  began  to  initiate  a  boycott 


GROWTH  97 

and,  worse  still,  a  systematic  blacklisting  of  working- 
men  belonging  to  cooperative  societies. 

This  campaign  finally  culminated  in  a  bitter  fight 
between  the  Wholesale  Society  and  the  wholesale  meat 
merchants  of  Glasgow.  The  latter  held  a  trade  con- 
ference and  passed  a  resolution  "  that  the  fleshers  of 
Glasgow  pledge  themselves  to  refuse  to  supply  co- 
operative societies,  either  wholesale  or  retail,  with 
flesh  meat,  or  to  have  any  commercial  transactions  with 
them  of  any  description  whatever." 

On  the  following  market  day,  when  the  buyer  for 
the  Wholesale  appeared  in  the  market  and  bid  twenty 
pounds  for  a  beef,  the  sale  was  refused  and  the  beef 
was  sold  to  a  private  dealer  for  eighteen  pounds. 
Then  the  Wholesale  carried  the  matter  into  court,  for 
the  market  was  municipal  property.  The  city  council 
decided  in  favor  of  the  Cooperators.  An  appeal  fol- 
lowed, in  which  their  decision  was  reversed.  All  this 
litigation  naturally  took  time;  the  real  fight  in  the 
economic  arena  was  decided  long  before. 

Cut  off  from  their  source  of  supply,  the  Cooperators 
went  out  to  the  local  farmers  and  so  obtained  a  limited 
supply.  The  butchers  sent  out  agents  who  threatened 
the  farmers,  with  not  much  effect.  Next  the  Whole- 
sale sent  a  buyer  over  to  Canada  to  negotiate  for  di- 
rect shipments  of  cattle.  A  delegation  from  the 
butchers  followed  him  and  attempted  to  frustrate  his 
mission  in  the  Canadian  market,  in  which  they  failed 
completely.  Having  got  into  direct  touch  with  the 
Canadian  live-stock  raisers,  the  Cooperators  were  not 
only  safe,  but  effected  an  economy. 

The  net,  final  result  was  utter  defeat  for  the  traders, 
for  the  struggle  had  received  a  vast  amount  of  pub- 
licity in  the  press  and  turned  public  sympathy  toward 
cooperation. 


98  consumers'  cooperation 

As  already  stated,  this  resistance  on  the  part  of  trade 
interests  against  the  advance  of  cooperation  has  mani- 
fested itself  wherever  the  latter  has  appeared,  but  in 
the  various  countries  there  has  been  a  difference  in 
method  or  tactics.  In  Germany  the  fight  against  the 
Cooperators  has  been  almost  entirely  legislative,  for 
there  the  private  interests  have  had  the  strong  sym- 
pathy and  help  of  the  ruling  classes,  something  they 
have  not  entirely  had  in  Great  Britain,  in  spite  of  the 
"  class  struggle  "  theory  of  the  orthodox  Socialists. 
In  Great  Britain,  from  the  royal  family  down  to  coun- 
try gentlemen  Tories,  including  such  personages  as 
Earl  Grey,  the  Marquis  of  Rippon,  and  a  number  of 
prominent  churchmen,  there  has  been  a  decided  lean- 
ing in  favor  of  the  cooperative  movement,  sometimes 
taking  the  form  of  very  strong  support. 

In  Germany  this  same  aristocratic  class  has  taken 
the  side  of  the  capitalist.  Thus,  as  an  instance,  laws 
were  enacted  restricting  the  sales  of  cooperative  stores 
entirely  to  members,  which  have  had  no  other  effect, 
however,  than  to  swell  the  membership.  The  regu- 
lation preventing  civil  servants  from  dealing  with  co- 
operatives was  another  indication  of  this  active  oppo- 
sition on  the  part  of  those  in  authority. 

In  the  more  advanced  countries,  however,  speak- 
ing from  the  point  of  view  of  civil  rights,  the  fight  has 
been  more  or  less  confined  to  the  economic  field. 
Some  of  these  clashes  of  interest  have  had  decidedly 
picturesque  aspects,  as  in  Sweden  and  Switzerland  and 
Denmark, 

In  February,  191 1,  the  Swedish  Wholesale  began 
a  determined  effort  to  free  itself  from  the  domination 
of  the  sugar  trust,  from  which  the  whole  country  suf- 
fered. The  trust  controlled  the  Swedish  sugar  mar- 
ket and,  owing  to  a  highly  developed  organization  of 


GROWTH  99 

districts,  dictated  prices  all  over  the  country.  It  had 
at  this  particular  time  fixed  the  price  of  sugar  at  two 
and  one-fourth  oren  (about  three-fifths  of  a  cent) 
above  the  prices  prevailing  in  all  the  other  sugar  mar- 
kets in  the  world,  in  addition  to  the  import  duty.  If 
an  individual  trader  tried  to  import  sugar  on  his  own 
account,  the  trust  would  immediately  lower  the  price 
in  his  neighborhood  and  thus  drive  him  out  of  business. 

The  Swedish  Wholesale  had  obtained  permission 
from  the  trust  to  supply  sugar  to  its  societies  in  the 
immediate  neighborhood  of  Stockholm,  but  not  to  the 
rest  of  its  constituent  members  in  the  provinces.  All 
the  other  societies  were  obliged  to  buy  from  private 
wholesale  merchants  in  their  own  particular  districts, 
as  specified  by  the  trust. 

After  some  little  quiet  preparation,  the  Wholesale 
suddenly  began  importing  its  own  sugar,  in  spite  of 
the  high  duty,  and  to  supply  cooperative  societies  all 
over  the  country.  The  trust  at  once  lowered  its  prices, 
until  they  were  lower  than  in  all  other  countries,  re- 
gardless of  the  duty,  at  a  great  loss,  naturally.  But  it 
had  underestimated  the  strength  of  the  Wholesale. 
After  a  long  period  of  futile  contest,  it  gave  up  the 
fight,  after  suffering  a  tremendous  financial  loss.  The 
control  of  the  trust  over  the  cooperative  societies  was 
completely  broken,  while  the  general  public,  having  had 
its  attention  attracted  to  the  situation  by  the  publicity 
attending  the  fight,  turned  to  legislative  efforts  for  re- 
dress, the  final  result  being  that  the  trust  was  com- 
pletely broken. 

At  almost  the  same  time  the  Swedish  Wholesale  en- 
gaged in  a  similar  struggle  against  a  margarin  com- 
bine, with  even  more  decisive  results,  for  after  suffer- 
ing a  loss  of  two  million  three  hundred  thousand 
crowns,  the  margarin  combine  was  obliged  to  dissolve. 


lOO  CONSUMERS     COOPERATION 

Even  more  picturesque  was  an  event  of  this  nature 
which  took  place  in  Switzerland  only  a  few  months 
before  the  war  broke  out.  There  a  firm  by  the  name 
of  Bell  &  Co.  dominated  a  large  part  of  the  meat  sup- 
ply; through  its  extensive  system  of  packing  houses 
and  chain  stores  it  fixed  the  prices  of  all  kinds  of  meat, 
to  private  dealers  and  cooperative  stores  alike. 

One  day  the  Swiss  Wholesale  issued  a  declaration  of 
war;  it  was  determined  to  free  at  least  its  own  con- 
stituency from  the  domination  of  Bell  &  Co.  Only  a 
few  years  before  it  had  smashed  a  combine  of  big 
shoe  manufacturers,  and  thus  it  went  into  the  fight  with 
the  confidence  given  it  by  a  previous  victory. 

Even  the  daily  press,  which  generally  follows  the 
policy  of  giving  cooperative  activities  a  minimum  of 
space,  took  notice  of  this  impending  clash  between  two 
big  economic  interests.  It  looked  as  though  the  con- 
test might  be  a  thrilling  one. 

But  just  then,  as  hostilities  were  about  to  begin,  Bell 
&  Co.  raised  the  white  flag.  They  asked  for  terms. 
The  terms  offered  by  the  Wholesale  were  that  Bell  & 
Co.  sell  out  to  the  Wholesale.  That  was  done.  The 
Wholesale  first  bought  a  block  of  shares  in  the  cor- 
poration, which  gave  it  a  controlling  interest,  then 
gradually  ended  this  peculiar  partnership  by  buying 
out  the  private  shareholders,  and  so  the  organized  con- 
sumers of  Switzerland  gained  collective  possession  of 
their  own  meat  supply. 

I  might  give  page  after  page  of  such  incidents,  as 
the  contest  between  the  cement  combine  in  Denmark 
and  the  Danish  Wholesale,  still  in  progress,  or  the  re- 
cent struggle  between  the  Swiss  Wholesale  and  the 
chocolate  dealers.  In  every  instance  the  Cooperators 
have  been  victorious.  An  astonishing  feature  of  these 
events  has  been  the  apparent  ignorance  of  the  private 


GROWTH  lOI 

interests  of  the  principles  of  cooperation.  They  do 
not  seem  to  have  reahzed  the  nature  of  the  forces  they 
have  had  to  battle  with. 

On  the  other  hand,  these  passages  at  arms,  so  to 
speak,  have  served  to  bring  to  the  Cooperators  a  grow- 
ing realization  of  the  need  of  getting  ever  closer  and 
closer  to  their  original  sources  of  supply:  the  land. 

Which  brings  me  back  to  an  event  in  the  history  of 
the  English  Wholesale  Society  which,  I  cannot  help 
thinking,  will  some  day  be  regarded  as  one  of  the  sig- 
nificant incidents  in  the  history  of  modern  civilization 
in  general. 

For  some  years  previous  to  1896  the  Wholesale  was 
experiencing  difficulty  in  obtaining  a  regular  supply  of 
fresh  fruit  for  a  jam  factory  which  had  been  estab- 
lished on  rather  a  large  scale.  Then,  in  June,  1896, 
it  was  announced  that  the  managing  committee  had 
concluded  negotiations  for  the  purchase  of  an  estate 
of  seven  hundred  and  forty-two  acres,  at  a  cost  of 
one  hundred  and  fifty  thousand  dollars,  on  which  it 
was  proposed  to  raise  fruit  for  the  jam  factory. 

Thus  the  cooperative  movement  came  into  first  con- 
tact with  Mother  Earth  for  the  purposes  of  produc- 
tion. It  was  only  the  first  of  a  great  number  of  such 
purchases. 

In  1902  the  English  and  Scottish  wholesale  socie- 
ties formed  a  partnership  for  the  specific  purpose  of 
growing  their  own  tea  in  Ceylon,  where  a  plantation 
of  three  hundred  and  sixty-four  acres  was  then  ac- 
quired. This  original  purchase  was  added  to  at  in- 
tervals until,  in  191 3,  another  purchase  was  made,  ex- 
ceeding all  previous  ones,  bringing  the  total  acreage 
of  tea  plantation  in  Ceylon  belonging  to  British  Co- 
operators  up  to  nearly  three  thousand  acres.  Mean- 
while several  of  the  Continental  wholesale  societies 


I02  CONSUMERS     COOPERATION 

have  also  acquired  their  own  land  for  agricultural  pur- 
poses, notably  the  Swiss  Wholesale,  since  the  begin- 
ning of  the  war. 

As  yet  this  phase  of  Consumers'  Cooperation  is, 
comparatively  speaking,  in  its  experimental  stage, 
though  big  developments  in  this  direction  are  now 
(July,  19 1 9)  being  planned.  The  fact  that  these  hold- 
ings have  been  constantly  increased  would  seem  to 
show  that  results  have  been  good.  Naturally,  there 
are  those,  with  a  large  fund  of  sentiment  for  things  as 
they  are,  who  see  in  this  departure  something  repre- 
hensible; that  the  people,  as  consumers,  should  grow 
their  own  agricultural  produce  on  their  own  land  and 
so  enter  into  competition  with  the  farmer.  But  this 
question  we  shall  leave  to  a  discussion  in  a  later 
chapter. 

It  still  remains  to  point  out  that  consumers'  co- 
operative production  is  not  confined  to  the  wholesale 
societies,  though  it  is  more  easily  summed  up,  or 
visualized,  through  them.  Almost  equaling  their  in- 
dustries, in  the  aggregate,  are  the  productive  works  of 
a  great  many  of  the  large  local  societies.  As  already 
set  forth,  flour  milling  had  been  one  of  the  leading  fea- 
tures of  local  production,  in  the  days  when  the  mill 
dam  had  been  the  source  of  power.  Milling  then  came 
under  the  influence  of  the  tendency  toward  centraliza- 
tion, and  it  became  one  of  the  functions  of  the  whole- 
sale society.  But  there  were  still  many  forms  of  in- 
dustry which  were  not  yet,  and  probably  never  will 
be,  adapted  to  big-scale  centralization.  Obviously  the 
loaf  of  bread  which  is  delivered  to  our  doorstep  every 
morning  cannot  be  baked  at  any  great  distance  from 
the  table  of  the  consumer ;  at  least,  not  until  transpor- 
tation has  advanced  to  a  point  not  yet  in  sight. 

Many  of  the  larger  local   societies  do  their  own 


GROWTH  '    103 

baking,  especially  in  the  Continental  countries.  In- 
deed, in  Belgium  cooperative  societies  have  invariably 
begun  with  baking  the  bread  of  their  members  and 
only  taken  up  other  foodstuffs  when  baking  had  estab- 
lished them  on  a  firm  financial  basis.  There  the  co- 
operative bakeries  assume  the  proportions  of  big  in- 
dustrial plants. 

In  Great  Britain  this  usually  came  later,  after  the 
sale  of  foodstuffs  had  brought  the  consumers  together. 
Then  local  societies  would  either  take  up  baking  by 
themselves,  or  form  district  federations  for  the  pur- 
pose. A  striking  illustration  of  this  latter  practice  is 
seen  in  the  United  Cooperative  Baking  Society  of 
Glasgow,  composed  of  a  score  or  more  of  local  socie- 
ties, their  central  plant  in  the  city  being  rated  as  the 
biggest  and  most  modernly  equipped  bakery  in  the 
world.  In  1909  this  bakery  was  using  nearly  four 
thousand  sacks  of  flour  a  week  for  the  production  of 
bread  and  biscuits.  In  the  baking  of  the  latter  it  has 
saved  the  Scottish  Wholesale  Society  the  necessity  of 
establishing  its  own  baking  plant,  which  obtains  bis- 
cuits for  its  members  all  over  Scotland  from  the  Bak- 
ing Society,  the  net  result  being  the  same,  since  private 
profit  is  nowhere  involved.  In  the  city  of  Glasgow,  at 
least,  the  United  Cooperative  Baking  Society  has  revo- 
lutionized the  baking  industry.  Previously  bread  was 
universally  baked  in  small,  unsanitary  cellars,  or  base- 
ments. The  Cooperators,  by  establishing  their  great 
modern  bakery,  brought  the  industry  above  ground 
into  the  light  of  the  sun.  Within  recent  years  this  in- 
stitution has  extended  its  activities  to  Ireland,  where  it 
has  two  big  branch  bakeries  in  operation. 

Many  local  societies  also  carry  on  market  garden- 
ing, some  of  them  growing  vast  quantities  of  toma- 
toes, as  an  example,  under  acres  of  glass.     Others 


I04  CONSUMERS     COOPERATION 

have  dairy  farms  and  deliver  fresh  milk  to  their  mem- 
bers every  morning ;  obviously  the  Wholesale  could  not 
do  this. 

Another  local  form  of  enterprise,  though  hardly  to 
be  classed  as  productive,  is  housing.  This  has  been 
especially  practiced  in  Scotland,  Germany,  and  Den- 
mark, though  it  is  also  done  in  the  other  countries. 
The  principle  is  quite  different  from  our  building  and 
loan  societies,  in  .which  the  builder  is  merely  supplied 
with  capital.  The  Scottish  or  German  local  coopera- 
tive society  buys  the  land  and  builds  the  houses,  then 
rents  them  out  to  the  members  on  the  same  basis  on 
which  it  distributes  groceries.  In  the  big  cities,  as  in 
Glasgow,  Hamburg,  and  Copenhagen,  the  society 
builds  a  row  of  apartment  houses  and  rents  the  sepa- 
rate apartments  out.  At  the  end  of  the  year  the  profits 
are  figured  out  and  returned  to  the  tenants,  in  pro- 
portion to  the  amount  of  rent  paid.  As  Mr.  Maxwell, 
the  Scottish  Cooperator,  once  told  me,  there  were  many 
people  in  Glasgow  who  found  their  rebates  from  their 
store  purchases  sufficient  to  pay  their  rent,  so  that 
membership  practically  meant  they  lived  rent  free,  or, 
as  he  expressed  it,  they  "  ate  their  way  into  house  and 
home." 

I  have,  in  this  account  of  development  before  the 
war,  touched  very  lightly  on  the  movement  on  the  Con- 
tinent. Naturally,  Great  Britain  has  maintained  the 
lead  in  the  progress  of  the  movement  and,  to  a  large 
extent,  the  Continental  Cooperators  have  clung  close 
to  British  example,  with  the  exception  of  Belgium,  to 
whose  movement  I  shall  devote  a  special  chapter.  In 
regard  to  membership,  Germany  was  fast  catching  up 
to  Scotland  before  the  war  broke  out,  while  considered 
in  its  proportion  to  the  rest  of  the  population,  the  Swiss 
movement  was  as  big  as  the  British.     As  repeatedly 


GROWTH  105 

mentioned  before,  big  strides  have  been  made  on  the 
Continent  during  the  war,  and  in  the  chapter  devoted 
to  these  most  recent  events  I  shall  give  the  Continental 
countries  their  due  mention. 

Just  what  the  rate  of  increase  of  this  world-wide 
cooperative  organization,  with  its  revolutionary  inno- 
vations in  the  field  of  industry,  has  been  since  the  be- 
ginning of  the  century  can  be  estimated  accurately  in 
those  countries  only  where  the  movement  has  been 
self-conscious  during  all  that  period.  In  many  of 
them  there  was  no  articulated  movement  in  1900  and 
the  importance  of  keeping  statistics  was  not  thought 
of.  Furthermore,  when  figures  were  issued,  there 
was  that  same  confusion  of  forms  which  existed  in 
England  in  the  early  days  and  it  was  impossible  to 
know  to  what  extent  they  referred  to  members  of  the 
consumers'  movement  or  to  members  of  credit  unions, 
agricultural  sales  societies,  etc.  These  are  matters 
which  the  International  Cooperative  Alliance  is  only 
now  beginning  to  clear  up  and  standardize. 

In  Great  Britain  the  membership  had  passed  the 
three  million  mark  in  1913;  counting  each  member 
as  the  head  of  a  family,  or  household,  not  far  from 
one-fourth  of  the  total  population.  In  some  parts  of 
Scotland  and  the  north  of  England  whole  communities 
practically  belonged  en  masse  to  the  local  society  and 
had  swept  private  trade  entirely  out  of  the  town  or  vil- 
lage. Basel,  in  Switzerland,  is  said  to  have  reached 
this  point  of  organization,  the  private  traders  there 
supplying  only  travelers  and  foreign  guests. 

Just  before  the  outbreak  of  the  war  Germany  ranked 
second  in  regard  to  membership,  counting  Great  Britain 
as  one,  with  1,800,000  members.  Then  came  Russia, 
with  1,400,000;  France,  900,000;  Austria-Hungary, 
500,000,  and  Italy  and  Switzerland  with  a  quarter  of 


io6  consumers'  cooperation 

a  million  each.  The  rest  of  the  ten  million  members 
of  the  whole  international  movement  were  distributed 
among  the  smaller  countries,  especially  in  Denmark, 
Finland,  Sweden,  Belgium,  Holland,  and  Norway. 

In  the  matter  of  cooperative  trading  the  figures  were 
more  definite.  In  19 13,  sixteen  national  wholesale 
societies  reporting  did  a  business  of  sixty  million 
pounds  sterling,  which  was  well  over  a  quarter  of  a 
billion  dollars.  This  was  an  increase  over  the  previous 
year  of  $22,700,000.  No  society  showed  a  decrease; 
once  established,  on  a  truly  democratic  basis,  it  is  sel- 
dom that  a  wholesale  society  ever  does  show  any  fall- 
ing off.  In  Germany  the  rate  of  increase  was  13  per 
cent. ;  Switzerland,  29  per  cent. ;  Bohemia,  45  per  cent. ; 
Norway,  25  per  cent. ;  Russia,  35  per  cent. ;  and  Den- 
mark, 13  per  cent. 

These  figures,  of  course,  did  not  cover  the  total  trade 
of  the  various  national  movements.  Though  the 
wholesale  societies  strictly  limit  their  sales  to  coopera- 
tive societies,  the  local  societies  do  not  always  buy  all 
their  supplies  from  the  wholesales,  as  in  the  case  of 
societies  manufacturing  for  themselves. 

As  for  cooperative  production,  it  must  be  said  that 
on  the  Continent  it  had  hardly  begun.  The  Germans, 
the  Danes,  and  the  Swiss  had  made  the  most  notable 
beginnings,  but  nothing  to  be  compared  to  the  British. 


CHAPTER  X 

THE    "  MAISONS   DU    PEUPLE  "    OF   BELGIUM 

As  was  stated  in  the  last  chapter,  the  development  of 
cooperation  in  Great  Britain  has  been  followed  so 
closely  in  other  countries  as  not  to  need  any  special 
description  in  regard  to  principle  and  practice.  In 
Belgium,  however,  certain  original  departures  which 
have  been  taken  are  worthy  of  special  notice,  more 
especially  as  it  seems  highly  probable  that  these 
special  forms  may  be  adaptable  to  this  country.  In- 
deed, it  might  be  questioned  whether  the  British  them- 
selves might  not  study  Belgian  forms  of  cooperation 
to  no  little  advantage  to  their  own  movement. 

By  this  time  the  reader  must  be  fairly  familiar  with 
the  fundamental  principles  of  Consumers',  or  Roch- 
dale, Cooperation;  one  man,  one  vote;  the  restricted 
and  fixed  remuneration  of  capital;  unlimited  member- 
ship ;  and  the  return  of  "  profits  "  to  the  purchasing 
members  in  ratio  to  their  purchases.  The  last  feature 
is,  of  course,  not  a  principle  at  all,  but  a  practice  dic- 
tated by  expediency.  And  it  is  this  practice  which  the 
Belgians  have  modified,  with  some  remarkable  results. 
The  Belgian  idea  does  not  oppose  itself  to  the  Roch- 
dale plan  at  any  point;  it  supplements  it,  improves  it. 

As  in  all  other  countries,  the  first  attempts  at  co- 
operative effort  in  Belgium  were  failures,  "  The  his- 
tory of  the  first  twenty  years  of  our  movement,"  writes 
Louis  Bertrand,  the  historian  of  Belgian  cooperation, 
"  is  nothing  but  a  record  of  our  failures."     We  need 

107 


To8  consumers'  cooperation 

■  not  study  them.  The  story  is  the  same  for  all  coun- 
tries. The  story  of  the  failures  in  this  country,  which 
I  shall  give  later,  might  apply  to  Belgium,  too. 

Most  rare  occurrence  in  the  history  of  cooperation, 
the  first  successful  attempt,  which  was  to  stamp  its 
character  on  the  whole  national  movement  of  Belgium, 
seems  to  have  been  due  to  the  personality  of  one  man. 

Some  time  in  the  middle  seventies  Eduarde  Anseele, 
the  son  of  a  poor  shoemaker  of  Ghent,  then  a  mere 
youth,  felt  a  strong  desire  to  see  the  outside  world. 
So  he  left  his  native  city  and  began  to  wander  all  over 
Europe.  He  finally  brought  up  in  England,  where  he 
worked  for  a  while  as  a  'longshoreman  on  the  London 
docks. 

Already  a  Socialist,  and  deeply  class-conscious,  he 
took  a  keen  interest  in  all  working-class  organizations. 
Having  come  in  contact  with  some  of  the  Rochdale  co- 
operative stores,  he  observed  them  closely  and  took  the 
pains  to  acquaint  himself  with  their  internal  workings. 
He  was  strongly  impressed. 

When  the  boy  returned  to  Ghent,  some  time  after- 
ward, his  mind  was  full  of  ideas  suggested  to  him  by 
the  English  cooperative  stores.  To  one  of  his  radical 
temperament,  naturally,  the  lowering  of  the  cost  of 
living  must  have  seemed  of  only  secondary  importance 
as  a  feature  of  cooperation.  He  saw  this  form  of 
commercial  enterprise  in  its  broader,  its  social,  aspect, 
as  a  means  to  accomplishing  revolutionary  changes  in 
the  whole  industrial  system. 

One  evening  he  gave  a  talk  before  the  weavers* 
union  of  Ghent,  and,  after  he  had  described  the  co- 
operative movement  in  England,  he  presented  a  propo- 
sition to  the  assembled  weavers  wherein  he  suggested 
that  they  should  bake  their  bread  in  common.  But, 
instead  of  frittering  away  the  profits,  or  surplus,  of  the 


THE   "  MAISONS    DU    PEUPLE       OF   BELGIUM        IO9 

enterprise  in  penny  rebates  on  purchases,  he  suggested 
that  this  margin  should  be  devoted  to  a  collective  in- 
surance fund  from  which  the  members  might  be  helped 
in  time  of  illness,  unemployment,  or  other  troubles 
incidental  to  a  workingman's  life. 

Anseele  presented  his  scheme  so  convincingly  that 
the  weavers  advanced  him  a  loan  of  two  thousand 
francs,  and,  with  this  initial  capital,  he  rented  an  oven 
and  began  baking  bread  for  one  hundred  and  fifty 
families.  In  this  way  he  founded  the  "  Vooruit "  of 
Ghent. 

The  scheme  was  simple  enough.  Like  the  Rochdale 
societies,  after  whose  pattern  it  was  shaped,  the  Voo- 
ruit carried  on  its  business  with  the  money  advanced 
it  by  its  members  in  the  form  of  membership  dues,  or 
shares.  Each  member  was  entitled  to  just  one  vote 
in  the  afifairs  of  the  society,  a  board  of  directors,  or 
committee,  being  elected  by  them  to  carry  it  on. 

The  bread  was  sold  at  the  usual  market  price,  and 
at  the  end  of  the  quarter  the  profits  could  be  returned 
to  the  purchasing  members,  in  proportion  to  the 
amounts  of  their  purchases.  But,  unlike  the  Roch- 
dale societies,  the  members  allowed  this  surplus  to  ac- 
cumulate and  to  become  a  mutual  benefit  insurance 
fund. 

From  the  very  beginning  the  Vooruit  prospered. 
At  the  end  of  the  first  year  four  hundred  families  had 
subscribed  to  the  working  capital  and  were  getting 
their  daily  bread  from  the  communal  oven.  The  ma- 
jority probably  did  not  understand  the  theory  behind 
this  peculiar  enterprise  and  gave  it  their  support  only 
because  they  were  made  to  understand  by  their  leaders 
that  they  were  supporting  the  labor  movement  in  some 
vague  way.  The  benefits  were  not  immediately  appar- 
ent, for  the  prices  were  just  the  same  as  in  the  private 


no  CONSUMERS     COOPERATION 

bakeries.  With  each  loaf  of  bread  came  a  ticket. 
The  housewife  collected  these  coupons  because  her 
man  told  her  to  do  so.  A  little  pamphlet,  entitled 
"  Why  Marie  Should  be  a  Cooperator,"  tried  to  ex- 
plain in  simple  language  the  principle  on  which  the 
Vooruit  worked.  But  the  first  object  lesson  would 
,  come  at  the  end  of  the  first  quarter  when,  on  returning 
the  tickets  to  the  little  office  in  the  bakery,  Marie 
would  find  that  they  had  a  certain  purchasing  value  in 
that  free  bread  could  be  procured  for  them.  Thus  a 
certain  percentage  of  the  profits  was  returned  to  the 
purchasers,  but  not  in  cash.  The  bulk  of  the  surplus, 
however,  was  accumulating  in  the  treasury  of  the  so- 
ciety. 

Then,  gradually,  Anseele,  who  probably  had  a  pretty 
free  hand  in  those  early  days,  began  to  put  his  special 
theory  into  practice. 

Marie's  husband  was  out  of  work.  Now  would  rise 
the  question  as  to  whether  this  new  bakery  would  ex- 
tend credit,  as  the  little  baker  in  the  cellar  around  the 
comer  had  done  before.  Ready  cash  was  no  longer 
available.  Yet  every  morning  the  dogcart  from  the 
Vooruit  would  appear  and  deposit  the  daily  loaf  on 
the  doorstep  as  usual. 

When  Marie's  husband  found  work  again,  she  had 
before  her  the  problem  of  paying  up  the  arrears  on  the 
bread  bill.  To  her  lively  surprise,  there  would  be 
nothing  to  pay. 

Next  came  a  period  when  one  of  the  children  was 
ill.  A  doctor  appeared,  cured  the  child,  and  would 
take  no  fee.     There  was  not  even  a  bill  for  medicines. 

"  The  Vooruit  pays  me,"  the  doctor  explained,  smil- 
ing. 

"  But  where  does  the  Vooruit  get  the  money  to  pay 
for  these  things?"  Marie  would  ask  her  man.     Piet, 


THE        MAISONS    DU    PEUPLE        OF    BELGIUM        III 

having  attended  the  meetings  of  the  society,  would  be 
able  to  explain. 

"  We  pay.  When  we  buy  our  bread  from  a  private 
baker,  he  makes  a  profit  from  us,  which  he  puts  into 
his  own  pocket.  The  Vooruit,  being  our  own  bakery, 
uses  this  profit  for  our  own  benefit,  when  we  most 
need  it." 

This,  in  its  initial  stage,  was  Anseele's  scheme.  It 
did  include  the  return  of  the  profits  to  the  purchasing 
members,  not  exactly  in  proportion  to  purchases,  per- 
haps, but  in  such  a  way  as  to  work  on  the  heartstrings 
of  the  recipients;  when  they  most  needed  it,  in  fact. 
Being  a  workingman  himself,  Anseele  understood  the 
psychology  of  his  people.  It  was  his  mode  of  propa- 
ganda, and  propaganda,  he  realized,  must  appeal  to  the 
emotions,  rather  than  to  the  brain.  Utilized  for  a 
better  purpose,  it  was  merely  the  same  appeal  which 
the  Tammany  politician  makes  when  he  sends  the  poor 
widow  a  ton  of  coal  in  his  district  or  when  he  bails  out 
the  workingman  of  his  constituency  who  has  come 
into  violent  contact  with  the  police  during  a  Saturday 
night's  spree.  Only  Anseele  systematized  the  idea. 
Indeed,  with  all  the  Socialist's  horror  of  charity,  he 
spared  no  pains  in  making  it  plain  to  the  members  and 
their  wives  that  this  manner  of  giving  was  not  charity: 
that  they  themselves  paid  the  bills. 

Anseele  had  need  to  weave  the  emotions  of  his  peo- 
ple into  the  organization  he  was  building,  for  pres- 
ently he  was  to  find  himself  violently  opposed  by  an 
organization  quite  as  adept  in  this  same  sort  of  prac- 
tice —  the  Catholic  Church. 

The  priests,  as  soon  as  they  realized  the  growing 
strength  of  the  Vooruit,  lost  no  time  in  attacking  it. 
Not  that  they  were  opposed  to  cooperation  in  itself,  as 
a  practice,  at  least,  but  they  were  decidedly  against  the 


112  CONSUMERS     COOPERATION 

theoretical  Socialism  which  Anseele  and  the  other  lead- 
ing spirits  of  the  society  preached. 

"  We  are  bombarding  the  capitalist  citadel  with 
loaves  of  bread,"  he  had  said,  in  one  of  his  public 
speeches. 

The  priests  lost  no  time  in  empty  abuse  or  vitupera- 
tion, but  began  organizing  a  society  based  on  the  same 
principles  as  the  Vooruit,  except  that  they  were  the 
management  committee. 

Here  was  the  first  check  to  Marie's  enthusiasm  for 
the  Vooruit;  to  decide  between  that  and  her  loyalty 
to  the  Church,  whose  priests  told  her  to  use  all  her 
powers  of  persuasion  to  get  her  man  away  from  the 
influence  of  those  dangerous  agitators,  the  Socialists. 
Nor  was  it  merely  a  matter  of  faith.  Nearly  all  her 
simple  pleasures  and  those  of  the  children  were  bound 
up  with  the  Church.  The  parish  priest  organized  all 
their  festivals  and  entertainments :  while  the  men  could 
go  to  the  cafes,  the  women  and  children  were  depend- 
ent on  the  parish  house  for  such  recreations  as  were 
proper  for  them. 

"  The  priests  have  learned  cooperation  from  us," 
said  Anseele,  when  the  Catholic  baking  societies  began 
to  appear ;  "  now  we  must  learn  from  them.  Without 
the  women  our  bakery  can  never  prosper.  We,  too, 
must  give  them  dance  music." 

Shortly  after  "  Ons  Huis "  (Our  House)  was 
opened  by  the  Vooruit  —  the  first  of  those  peculiar 
social  centers  famous  in  Belgium  under  the  name 
"  maison  du  peuple."  Every  tourist  passing  through 
the  country  is  familiar  with  that  name. 

But  in  those  early  days  Ons  Huis  attracted  very 
little  attention ;  it  was  a  modest  little  clubhouse,  rented 
from  the  profits  of  the  bakery.  Here  the  men  could 
gather  to  read  the  papers,  play  a  game  of  dominoes, 


THE        MAISONS    DU    PEUPLE        OF    BELGIUM        II3 

and  hear  a  song  from  a  comrade  once  in  a  while.  A 
buffet  dispensed  coffee,  soft  drinks,  and  beer  at  a 
slight  profit.  Save  for  the  absinth  and  the  gin,  it 
was  a  substitute  for  the  cafes. 

Then  the  men  were  encouraged  to  bring  their  wives 
and  children.  Music  and  dancing  were  introduced. 
The  leaders  brought  their  families  to  start  things  off. 
Little  by  little  other  forms  of  recreation  were  added, 
and  the  control  was  shared  by  the  women. 

In  0ns  Huis,  for  the  first  time,  Marie  found  herself 
participating  in  the  same  pleasures  with  her  husband. 
As  nothing  stronger  than  beer  could  be  had,  Piet  spent 
much  less  than  he  had  spent  in  the  cafes;  everything 
was  cheaper,  for  there  were  no  profits  to  be  made  for 
anybody.  On  the  contrary,  it  was  known  that  there 
was  a  deficit,  and  that  the  bakery  made  it  good.  The 
good  philanthropist  behind  this  first  Belgian  social  cen- 
ter  was  the  people  themselves. 

From  then  on  the  membership  of  the  Vooruit  ex- 
panded rapidly.  All  over  Belgium  similar  societies 
were  organized.  In  Jolimont  "  L'Progres  "  made  a 
similar  appeal  to  the  coal  miners,  and  there  the  gin 
mills  were  an  enemy  even  more  potent  than  the  priests. 
But  L'Progres  won  out;  it  put  the  gin  mills  out  of 
business  by  establishing  a  cooperative  brewery  whose 
beer  was  so  good  and  cheap  that  the  miners  all  joined 
the  society;  practically  the  whole  population  became 
affiliated. 

Just  before  the  war  there  were  slightly  over  two 
hundred  such  cooperative  centers  all  over  Belgium,  all 
patterned  after  Anseele's  Vooruit. 

The  commercial  success  of  the  cooperative  enter- 
prises in  Belgium  is  their  least  remarkable  feature; 
they  have  not  had  the  time  to  develop  such  gigantic 
establishments   as   in   Great   Britain  or  Germany   or 


1 14  CONSUMERS     COOPERATION 

Switzerland,  especially  in  the  field  of  production.  But 
in  1912  the  Vooruit's  bakeries  employed  nearly  one 
hundred  bakers,  working  under  model  union  condi- 
tions, turning  out  one  hundred  and  ten  thousand  loaves 
of  bread  a  week.  Besides  the  two  bakeries  the  Voo- 
ruit  owned  a  big  department  store,  twenty-one  gro- 
ceries, five  clothing  and  six  shoe  stores,  a  coal  depot, 
a  chain  of  drug  stores,  a  large  brewery,  and  one  of 
the  biggest  printing  establishments  in  Belgium,  all  net- 
ting a  yearly  surplus  of  a  quarter  of  a  million  dollars. 
In  Brussels  and  Jolimont  the  figures  are  even  more 
impressive. 

About  thirteen  years  ago  the  Royal  Club  of  Ghent, 
an  organization  corresponding  somewhat  to  our  Union 
League  Club,  in  New  York  City,  found  itself  in  finan- 
cial difficulties.  Its  clubhouse,  a  palatial  building  with 
a  park  surrounding  it,  was  put  up  for  sale.  At  once 
the  Vooruit  presented  itself  as  a  buyer. 

But  the  residents  of  the  district,  prosperous  mer- 
chants and  officials,  objected  so  strongly  to  having  a 
workingmen's  resort  in  that  neighborhood  that  the 
trustees  of  the  club  were  forced  to  call  oflf  the  negoti- 
ations with  the  Vooruit.  Finally  the  building  and 
grounds  were  sold  to  a  stranger,  representing  himself 
as  the  agent  for  a  wealthy  foreigner  who  wished  to 
take  up  his  residence  in  the  city  for  business  rea- 
sons. 

The  following  Sunday  the  residents,  who  had  con- 
gratulated themselves  on  having  rid  themselves  of  an 
unpleasant  prospect,  were  awakened  at  an  early  hour 
by  the  sounds  of  a  brass  band  and  a  volume  of  cheers. 
Looking  out  of  their  windows,  they  saw  a  black  col- 
umn of  working  people  marching  up  their  quiet  streets 
and  turning  into  the  grounds  surrounding  the  Royal 


THE    "  MAISONS    DU    PEUPLE        OF   BELGIUM        II5 

Club  building.  A  short  time  afterward  they  saw  the 
Vooruit's  flag  floating  over  the  roof. 

In  this  way  the  Vooruit  acquired  its  big  clubhouse, 
of  which  the  modest  little  0ns  Huis  is  now  only  a 
branch.  Some  years  ago  a  leading  American  magazine 
{Everybody's)  devoted  a  whole  article  to  it,  giving 
full-page  illustrations  of  the  mural  decorations,  which 
were  executed  by  Jules  van  Biesbroeck,  the  famous 
Flemish  painter  and  sculptor,  whose  studio  occupied 
a  part  of  the  top  floor.  Here,  before  the  war,  he  con- 
tinued his  work,  subsidized  by  the  members  of  the 
Vooruit  to  create  a  new  art  which  should  interpret  the 
struggles  of  the  labor  movement.  One  of  his  marble 
groups,  "  Vers  L'Emancipation,"  has  gained  him  an 
international  reputation  and  is  reproduced  as  a  frontis- 
piece in  many  of  the  pamphlets  published  by  the  Fed- 
eration of  Belgian  Workingmen's  Cooperative  Socie- 
ties. 

It  would  be  difficult  to  compare  this  "  house  of  the 
people  "  in  Ghent  with  anything  in  this  country.  The 
community-center  movement  here  is  striving  toward 
something  in  this  direction,  but  none  of  its  promoters 
has  yet  suggested  anything  on  the  scale  of  the  Vooruit's 
clubhouse  or  the  great  "  Maison  du  Peuple  "  of  the 
Brussels  society. 

Here  Marie,  Piet,  and  the  children  could  spend  their 
evenings  and  Sundays,  dancing,  enjoying  moving- 
picture  shows,  or  gathered  about  a  table  in  the  cafe 
talking  and  listening  to  music.  Or,  if  they  felt  more 
seriously  inclined,  they  might  climb  the  broad  stair- 
case past  Van  Biesbroeck's  marble  groups,  and  listen 
to  lectures,  debates,  concert  recitals,  or  read  in  the  big 
library.  Or  they  might  go  to  the  theater ;  they  would 
be  pretty  sure  to  like  the  play,  for  previously  they  had 


ii6  consumers'  cooperation 

participated  in  an  election,  choosing  both  plays  and 
actors  for  the  season,  Maeterlinck's  plays  were  said 
to  have  been  most  represented :  that  may  have  been  na- 
tional pride  more  than  good  taste. 

In  summertime  they  could  promenade  the  garden 
walks,  listening  to  the  music  from  the  bandstand,  or 
they  could  sit  by  the  tables  under  the  trees,  drinking 
coffee,  lemonade,  or  beer.  Every  recreation  that  a 
normal  human  being  might  demand  could  be  had  here, 
for  all  was  under  the  democratic  control  of  the  pleas- 
ure seekers  themselves;  they  were  the  owners  as  well 
as  the  patrons,  and  if  the  Board  of  Seven  failed  to  give 
them  what  they  wanted  they  could  recall  it  from  office 
whenever  they  desired. 

Naturally,  however  democratic  the  system  might  be, 
some  of  the  ideas  had  come  down  from  above ;  Anseele 
and  his  associates  made  their  influence  felt.  The  edu- 
cational features  of  many  of  the  activities  were  not 
conceived  by  Piet  and  Marie;  they  never  dreamed  of 
dramatic  or  literary  circles  until  they  were  presented 
to  them. 

The  children's  traveling  clubs  were  one  of  these 
features. 

In  the  summertime  one  of  these  clubs  would  start 
out  on  a  walking  tour.  Its  route  would  be  so  mapped 
out  that  each  evening  would  find  the  tramping  mem- 
bers in  some  Cooperative  center.  As  they  approached 
the  town  the  local  Cooperators  would  march  out  to 
meet  them,  and  together  they  would  walk  back  into 
the  town  behind  the  local  cooperative  band.  After  the 
evening's  entertainment  each  member  would  find  free 
lodging  with  a  local  family.  When  the  march  was 
resumed  in  the  morning,  probably  the  local  traveling 
club  would  join  the  march.  And  so  these  tours  would 
continue  across  the  frontier  into  Holland,  France,  or 


THE        MAISONS   DU    PEUPLE       OF   BELGIUM        II7 

Germany,  where  there  would  be  no  dearth  of  hearty 
cooperative  welcomes.  Latterly  these  tours  had  taken 
on  more  pretentious  dimensions,  extending  to  Switzer- 
land and  England,  the  added  cost  being  only  in  the 
train  fares. 

Of  course,  only  the  older  children  and  adults  could 
participate  in  these  walking  tours,  but  the  younger 
children  got  their  trips,  too.  Special  bureaus  in  the 
various  centers  arranged  for  a  systematic  exchange  of 
children  between  the  families  in  the  Flemish  and 
French  provinces,  the  object  being  that  the  children  of 
both  national  sections  of  the  country  should  learn  both 
languages  by  intimate  association  with  each  other. 
During  the  general  strike  of  19 13  these  bureaus  were 
kept  busy  sending  thousands  of  children  out  of  the 
country;  to  some  hundreds  of  them  the  strike  meant 
only  a  jolly  vacation  trip  to  Paris.  It  was  this  system 
which  proved  so  suggestive  to  the  Lawrence  strikers  in 
191 1 ;  in  Lawrence  the  Belgian  immigrant  mill  hands 
had  organized  the  Franco-Beige  Cooperative  Society, 
and  it  was  its  members  who  suggested  the  sending  of 
the  Lawrence  strikers'  children  to  other  cities. 

The  same  human  element  runs  through  all  the  ac- 
tivities of  the  Belgian  societies.  (I  am  still  justified 
in  speaking  in  the  present  tense,  as  will  be  obvious  in 
my  chapter  on  the  war.)  Even  emergencies  are  han- 
dled in  the  same  spirit.  Nothing  illustrates  this  better 
than  a  story  that  is  told  of  the  Maison  du  Peuple  in 
Brussels. 

The  workingmen  in  a  quarry  not  far  from  Brussels 
had  gone  on  a  strike  for  higher  wages.  Being  all 
stanch  Catholics,  they  were  not  affiliated  with  any  gen- 
eral labor  organization,  so  they  neither  asked  nor  re- 
ceived any  outside  help.  As  a  consequence  their  re- 
sources were  soon  at  an  end,  and  finally  their  hungry 


ii8  consumers'  cooperation 

families  compelled  them  to  call  a  general  meeting  for 
the  purpose  of  discussing  the  proposition  of  going 
back  to  work.  While  they  were  talking  four  big  trucks 
drove  into  the  village  and  drew  up  before  strike  head- 
quarters ;  each  was  heavily  loaded  with  foodstuffs  and 
above  each  fluttered  the  flag  of  the  Maison  du  Peuple 
of  Brussels.  The  meeting  adjourned,  the  strikers 
cheering  and  all  trying  at  once  to  embrace  the  four 
truck  drivers.     The  strike  was  won. 

Naturally,  every  one  of  those  quarrymen  became  an 
enthusiastic  Cooperator. 

At  the  present  time  many  of  Anseele's  original  in- 
surance and  recreational  features  have  been  enlarged 
or  amplified.  The  benefits  have  expanded  widely.  A 
certain  period  of  steady  purchasing  entitles  the  older 
members  of  the  Vooruit  to  a  pension,  increasing  with 
each  year.  Day  nurseries  for  the  workingwomen  have 
become  a  regular  institution.  Through  this  system  of 
cooperative  insurance  and  recreations  the  Belgian  labor 
movement  has  acquired  a  solidarity  which  can  perhaps 
not  be  equaled  in  any  other  country.  It  was  Anseele's 
theory  that  a  really  vital  organization  must  be  knit 
together  by  the  heartstrings  of  its  individual  members, 
and,  acting  on  this  belief,  he  really  created  such  an 
organization. 

There  can  be  little  doubt  that  the  Belgian  coopera- 
tive movement  would  have  expanded  much  more  than 
it  has  had  it  not  been  for  certain  features  that  have  ap- 
parently acted  as  a  handicap  to  expansion. 

The  first  of  these  unfortunate  handicaps  is  un- 
doubtedly the  close  relationship,  the  identity,  in  fact, 
of  the  cooperative  movement  and  the  Labor  party,  a 
Socialist  political  party.  It  is  one  thing  for  a  na- 
tional cooperative  movement  to  go  into  politics  on  its 
own  basis,  to  protect  itself  ag:.!n:t  adverse  legislation. 


THE    "  MAISONS   DU    PEUPLE       OF   BELGIUM        1 IQ 

It  is  quite  another  thing  for  it  to  harness  itself  closely 
together  with  a  political  party  based  on  a  series  of  un- 
demonstrated  bookish  theories  conceived  in  the  minds 
of  dreaming  idealists,  however  uplifting  they  may  be 
in  spirit.  In  Belgium  the  recruit  to  the  cooperative 
society  must  accept  the  whole  orthodoxy  of  Socialist 
faith.  This,  first  of  all,  has  kept  out  that  element 
which,  though  possessed  of  an  open  mind,  refuses  to 
bind  itself  to  any  creed  whatsoever.  Only  one  who  is 
temperamentally  a  Socialist  will  bind  himself  to  a  So- 
cialist party.  If  the  cooperative  society  is  attached  to 
this  as  an  integral  part,  he  refuses  to  join  it  on  those 
conditions.  Thus  the  cooperative  movement  in  Bel- 
gium, while  growing  in  depth,  has  been  confined  within 
the  boundaries  of  the  political  Socialist  party. 

The  second  unfortunate  feature  of  Belgian  coopera- 
tion has  been  the  inability  of  the  local  societies  to  ap- 
preciate the  importance  of  closer  federation,  especially 
for  the  purpose  of  production.  Here  the  Socialist  na- 
ture of  the  movement  has  had  some  influence;  the  So- 
cialist attitude  that  it  is  more  important  to  fill  the 
coffers  of  the  political  party  than  to  develop  the  co- 
operative organization  back  to  original  sources  of 
supply.  Satisfied  with  the  results  from  the  distribu- 
tive enterprises,  they  have  not  thought  it  worth  while 
to  push  on  to  production,  but  have  concentrated  their 
energies  to  spreading  Marxian  propaganda  and  get- 
ting their  members  elected  to  the  National  Assembly. 

Another  reason  for  this  backwardness  in  the  field 
of  production  has  been  the  sentimental  regard  for  the 
self-governing  workshop  groups  of  workers.  A  hand- 
ful of  workingmen  exploiting  a  quarry,  or  a  dozen 
sabot  makers,  calling  themselves  a  cooperative  society 
and  employing  the  familiar  Socialist  terminology,  have 
appeared  to  many  of  the  Belgian  leaders  as  the  true 


120  CONSUMERS     COOPERATION 

goal  of  the  working  classes  striving  for  their  eman- 
cipation. They,  like  the  Christian  Socialists  of  Eng- 
land, have  also  been  obsessed  of  the  fallacy  that  each 
worker  should  have  his  own  tools  in  his  hands. 

Fortunately  the  Manchester  idea  has  been  gaining 
ground  rapidly  of  recent  years.  The  Wholesale  So- 
ciety, with  headquarters  in  Antwerp,  has  steadily  pro- 
gressed within  the  past  few  years,  and  among  the 
younger  generation  are  those  who  realize  the  broader 
conception  of  collectivism. 


CHAPTER  XI 

COOPERATION   DURING   THE   WAR 

Though  a  revolutionary  movement  in  ultimate  pur- 
pose, it  will  be  noted  that  cooperative  activity  com- 
prises mainly  a  series  of  commercial  and  industrial  en- 
terprises, varying  from  a  small  store  to  factories  which 
are  the  biggest  of  their  kind  in  the  world.  In  practical 
details,  at  least,  these  establishments  are  operated  by 
very  much  the  same  methods  that  a  capitalist  would 
employ,  and  they  are,  one  might  well  assume,  subject 
to  the  same  economic  laws  that  control  industry  in 
general.  It  was,  therefore,  natural  to  expect  the  same 
depression  and  dislocation  within  the  cooperative  move- 
ment, when  war  threatened,  that  industry  and  com- 
merce in  general  always  suffer  on  such  occasions. 
Hundreds  of  thousands  of  members  being  called  to  the 
colors  and  diminished  incomes  on  the  parts  of  their 
families  would  logically  result  in  a  falling  off  of  co- 
operative trade.  At  any  rate,  it  seemed  more  than 
probable  that  cooperation  would  suffer  a  decided  set- 
back during  the  war;  at  the  best  it  might  barely  hold 
its  own. 

What  actually  did  happen  was  unexpected  by  both 
friends  and  foes  of  the  movement. 

All  those  who  followed  the  dispatches  at  the  time 
will  remember  the  mad  food  panic  that  followed 
the  declaration  of  war.  Those  who  had  ready  cash, 
fearing  all  sorts  of  disruptions  in  the  general  supply 
of  foodstuffs,  rushed  frantically  to  the  stores  and  be- 

121 


122  CONSUMERS     COOPERATION 

gan  laying  in  supplies  for  weeks,  sometimes  months, 
ahead,  leaving  the  poorer  classes  to  face  the  exorbitant 
prices  of  the  speculators.  This  was  the  situation 
which  faced  the  cooperative  stores  as  well  as  the 
private  dealers. 

A  hasty  survey  assured  the  officials  of  the  English 
and  Scottish  Wholesale  Societies  that  they  had  on 
hand  enough  of  all  the  necessities  to  supply  the  normal 
needs  of  their  members  for  several  months.  Reas- 
suring messages  were  sent  to  all  the  local-store  com- 
mittees, with  the  advice  that  they  restrict  all  sales  to 
individuals  to  their  previous  average  rate  of  pur- 
chasing, but  not  to  raise  prices. 

This  was  done  by  all  the  stores.  The  result  can 
readily  be  imagined.  The  whole  consuming  public 
swung  over  to  the  cooperative  stores.  Before  some 
of  them  people  stood  in  line  blocks  in  length. 

It  required  only  twenty-four  hours  of  this  situation 
to  make  the  wholesale  officials  realize  that  their  cal- 
culations were  going  to  upset.  They  were  not  going 
to  supply  the  whole  population  and  then  let  their 
own  members  suffer  a  week  or  two  hence.  Where- 
upon there  were  general  instructions  to  sell  only  to 
members. 

The  result  of  this  ruling  was  that  there  was  a  wild 
rush  of  applicants  for  membership.  One  London  store 
enrolled  three  hundred  in  one  forenoon.  This  brought 
back  the  same  old  situation.  And  then  the  stores  tem- 
porarily debarred  all  new  members,  and  something  like 
normal  conditions  were  restored. 

Meanwhile  the  panic  in  the  open  market  continued. 
When  the  private  dealers  were  charging  twelve  cents 
a  pound  for  sugar,  the  cooperative  stores  in  the  same 
districts  were  charging  only  five  cents.  Up  in  Scot- 
land coal  dealers  sent  up  the  price  of  coal  day  by  day, 


COOPERATION    DURING    THE    WAR  I23 

pleading  the  unusual  risks  of  the  sea  as  the  pretext. 
The  Aberdeen  Cooperative  Society,  which  owns  its  own 
steamers,  after  allowing  the  crews  a  raise  of  forty 
per  cent  as  compensation  for  the  added  risks,  trans- 
ported coal  at  a  raise  of  only  twelve  cents  on  the  ton. 
Private  landlords  were  raising  rents  all  over.  The 
cooperative  societies  did  not  raise  rents  one  penny. 
Then  came  a  popular  agitation  for  government  regula- 
tion of  prices,  and  at  the  head  of  the  agitation  were 
the  officials  of  the  cooperative  societies.  This  made 
an  especially  strong  impression  on  the  public,  for  the 
private  traders  were  all  on  the  other  side,  shouting 
the  familiar  phrase,  "  Let  us  alone." 

At  the  end  of  the  year  these  events  were  to  be 
crystallized  into  cold  figures.  It  was  then  that  the 
general  secretary  of  the  Cooperative  Union  reported  an 
increase  in  the  general  membership  during  the  past 
year  of  176,750.  Compare  this  with  the  average 
yearly  increase  during  the  past  forty  years ;  70,000. 

For  the  same  period  the  local  societies  reported  a 
trade  of  $692,360,000,  an  increase  over  the  previous 
year  of  $42,000,000,  which  was  a  ten  times  bigger  in- 
crease than  the  year  before.  The  English  Whole- 
sale reported  sales  amounting  to  $175,000,000,  a  ten 
per  cent  increase,  as  compared  with  only  five  per  cent 
the  year  before. 

So  much  for  Great  Britain  —  covering  the  first 
six  months  of  the  war.  Meanwhile,  what  was  hap- 
pening in  other  countries  ? 

In  Germany  the  food  panic  was  even  more  acute 
than  in  Great  Britain,  for  the  Germans  realized  that 
the  British  navy  was  going  to  destroy  their  sea  com- 
merce completely. 

During  the  panic  the  German  stores  followed  the 
same  policy  as  the  British;  they  did  not  raise  prices 


124  CONSUMERS     COOPERATION 

SO  long  as  supplies  could  be  had.  Outsiders  began 
joining,  more  than  replacing  the  many  thousands  of 
members  drafted  into  the  army.  The  civil  servants 
who,  it  will  be  remembered,  were  forbidden  to  join 
cooperative  societies,  now  rose  against  this  govern- 
ment ruling,  and  so  determined  was  their  stand  that 
the  higher  authorities  rescinded  the  restriction. 

"  It  is  owing  to  this  change  of  attitude  on  the  part 
of  the  government,"  wrote  one  of  the  Wholesale  offi- 
cials, referring  to  this  incident,  "  and  to  a  more  clear- 
sighted view  of  things  on  the  part  of  the  public  that 
the  cooperative  stores  have  been  able  to  maintain,  and 
often  to  increase,  their  trade.  For  example,  the  co- 
operative bakery  in  Hamburg  has  had  to  record  an 
increase  of  sales  each  week,  in  spite  of  the  fact  that 
the  purchasing  power  of  nearly  all  consumers  has 
decreased.  The  societies  at  Frankfurt,  Brandenburg, 
and  elsewhere  have  to  report  similarly  .  .  .  The  Ger- 
man cooperative  journals  continue  to  appear  regularly 
and  are  profiting  from  the  lessons  of  the  present  time 
by  conducting  an  active  propaganda  in  favor  of  co- 
operation. If  the  political  parties  have  declared  a 
truce  (meaning  the  Socialists,  especially),  economic 
organizations  have  not  laid  down  their  arms  and 
their  antagonism  is  no  less  acute." 

"  Produktion,"  the  cooperative  society  in  Ham- 
burg, reported  at  the  end  of  the  year : 

"On  December  31  the  membership  of  the  society 
stood  at  78,517,  whereas  a  year  ago  it  totaled  only 
68,417,  so  that  there  was  an  increase  of  over  10,000 
during  the  year  .  .  .  Sales  were  $6,161,000,  which 
is  an  increase  of  $276,740  ...  To  the  27,159  savings 
accounts  which  we  had  a  year  ago,  4,439  were  added, 
while  only  2,604  were  closed." 

The   German  Wholesale   Society  had  a  turnover 


COOPERATION   DURING   THE   WAR  I25 

of  $40,000,000,  which  was  an  increase  of  $870,000 
over  the  year  before. 

From  France  there  were  no  such  encouraging  fig- 
ures; there,  indeed,  the  movement  seemed  to  have 
been  heavily  stricken.  For  fully  one-third  of  the  local 
societies  were  situated  in  just  those  districts  in  the 
north  where  the  actual  fighting  was  going  on.  Even 
when  nothing  worse  happened  to  them,  these  northern 
stores  were  unable  to  obtain  supplies  because  all  means 
of  transportation  had  been  monopolized  by  the  military 
or  else  disabled  through  the  destruction  of  bridges  or 
roadbeds. 

In  territory  actually  invaded  by  the  Germans  many 
stores  suffered  the  same  destruction  from  gunfire  that 
the  rest  of  the  community  did.  The  Magasin  de 
Gros,  the  French  Wholesale  Society,  had  several  of 
its  warehouses  situated  in  this  region,  at  Chateau- 
Regnault,  which  were  destroyed  during  the  battle  of 
the  Meuse. 

But  it  seems  that  after  the  German  soldiers  had 
once  entered  a  town,  the  cooperative  stores  some- 
times escaped  where  their  competitive  neighbors  did 
not.  The  story  of  an  incident  that  happened  in  one 
town,  Chateau-Thierry,  on  the  Aisne,  reported  by  one 
of  the  French  Wholesale  officials,  seems  to  be  typical 
of  a  number  of  such  cases. 

The  town  had  suffered  a  heavy  bombardment,  the 
French  had  retired,  and  many  of  the  civil  population 
had  followed  them.  But  the  manager  of  the  local 
cooperative  store,  together  with  his  clerks,  determined 
to  remain  behind  and  do  what  he  could  to  protect  the 
society's  property. 

When  the  German  soldiers  entered  the  town  they 
began  looting,  and  the  manager  of  the  cooperative 
store  expected  that  presently  his  establishment  would 


126  consumers'  cooperation 

suffer  the  same  fate.  And,  in  fact,  shortly  the  store 
was  crowded  with  German  soldiers,  all  demanding 
goods. 

But  to  the  intense  surprise  of  the  manager  and  his 
clerks,  the  Germans  grinned  at  them  good-naturedly 
and  offered  full  payment  for  what  they  took  and  some- 
times even  refused  change,  while  several  insisted  on 
shaking  hands. 

For  some  hours  the  store  did  a  roaring  business, 
though  the  manager,  not  understanding  German,  re- 
mained deeply  puzzled  as  to  why  the  store  was  being 
shown  such  special  consideration.  Later  on,  when 
he  had  occasion  to  go  outside,  the  puzzle  unraveled 
itself. 

Looking  over  the  doorway,  he  found  that  above 
the  French  word  "  Cooperative  "  on  the  sign  had  been 
chalked  the  German  equivalent :  "  Consumgenossen- 
shaft."  To  this  was  added  an  inscription  which  a 
townsman  was  able  to  translate  into  "  these  are  co- 
operative comrades,  boys;  don't  harm  them." 

A  German  soldier  who  was  wounded  and  came  to 
this  country  soon  after  the  outbreak  of  the  war,  tells 
me  that  while  shelling  a  French  town  at  rather  close 
range,  the  men  of  his  battery,  all  of  whom  were  So- 
cialists or  Cooperators,  persistently  refrained  from 
firing  at  a  building  above  whose  front  doorway  they 
could  see  the  sign  of  a  cooperative  store,  with  the  re- 
sult that  the  store  was  the  center  of  a  small  group  of 
buildings  standing  intact  amid  the  general  ruins.  That 
this  incident  may  probably  be  typical  is  indirectly 
verified  by  the  report  of  a  French  cooperative  leader, 
who  remarks  that  in  several  shell-raked  towns  only 
the  cooperative  store  had  escaped. 

Taking  the  French  cooperative  stores  outside  the 
actual  field  of  military  operations,  it  was  apparent 


COOPERATION    DURING   THE   WAR  12/ 

that  they  had  the  same  stabilizing  effect  on  economic 
conditions  as  in  other  countries. 

"  In  the  mining  districts,"  reported  the  Magasin  de 
Gros,  "economic  Hfe  runs  on  normal  lines  and  we 
are  besieged  with  orders,  which  can  not  always  be 
filled.  The  factory  at  L'Orient  is  working  as  usual 
and,  commercial  life  in  Paris  being  practically  at  a 
standstill,  our  sales  at  Bordeaux  have  increased.  It 
does  not  seem  that  the  Magasin  de  Gros  will  have 
much  difficulty  in  attaining  its  usual  turnover  at  the 
end  of  the  war,  in  spite  of  the  loss  of  the  warehouses 
in  the  Ardenne." 

"  We  have  assisted  the  National  Relief  Committee," 
said  another  report,  "  and  our  Wholesale  was  espe- 
cially intrusted  with  the  distribution  of  coal.  We  ap- 
proached the  Swiss  organization  Maggi  with  regard 
to  the  sale  of  milk  in  Paris  and  were  successful  in 
obtaining  this  for  the  population  at  unexpectedly  low 
prices.  Moreover,  our  management  of  the  workshops, 
established  by  the  Socialist  party,  the  General  Con- 
federation of  Labor,  and  the  National  Federation  of 
Cooperative  Societies,  intended  to  remedy  unemploy- 
ment by  the  execution  of  work  for  the  military  authori- 
ties, has  won  us  universal  sympathy." 

In  Belgium,  it  was  supposed,  the  disaster  to  the  co- 
operative movement  must  be  even  greater  than  it  had 
been  in  France.  For  months  no  news  came  through. 
And  then,  gradually,  reports  trickled  through,  of  which 
the  following,  published  as  a  news  item  by  the  Vor- 
wdrts,  of  Berlin,  is  only  one : 

"  The  large  cooperative  society,  Vooruit,  in  Ghent, 
has  enrolled  1,350  new  members  since  the  beginning 
of  the  war.  The  cooperative  weaving  society  in  the 
same  town  sends  its  productions  in  carts  to  such  places 
as  Liege  and  Charleroi,  journeys  of  four  days  .  .  . 


128  consumers'  cooperation 

During  the  war  a  wholesale  depot  has  been  opened  in 
Ghent,  to  supply  the  Flemish  societies.  Latterly  the 
society  at  Dinant,  in  the  valley  of  the  Meuse,  has 
opened  a  new  distributive  center  amid  the  ruins  of 
the  town." 

Returning  to  those  belligerent  countries  for  which 
figures  are  available,  Austria  is  the  only  instance  in 
which  a  decrease  of  wholesale  trade  is  reported, 
amounting  to  about  a  million  crowns,  and  this  was 
said  to  be  entirely  due  to  dislocation  of  transportation 
facilities.  The  local  societies  reported  an  immense  in- 
crease of  trade,  but  being  obliged  to  obtain  their  sup- 
plies from  private  traders,  much  of  the  increase  was 
probably  due  to  higher  prices. 

The  Wholesale  Society  in  Prague,  however,  sup- 
plying the  Bohemian  societies,  reported  an  increase  of 
sales  during  the  year  amounting  to  112,000  crowns, 
which  was  three  and  a  half  per  cent  higher  than  the 
year  before. 

For  Hungary  the  figures  were  more  detailed.  Ac- 
cording to  a  government  trade  report  (and  it  must 
be  remembered  that  in  Hungary  there  was  the  same 
animosity  from  higher  up  against  the  Cooperators  as 
there  was  in  Germany),  the  increase  in  general  mem- 
bership was  11,883,  or  three  and  a  half  per  cent, 
while  the  total  trade  was  106,000,000,  an  increase  of 
6,000,000  crowns. 

Russia  I  have  left  to  the  last,  for  here  the  develop- 
ment of  cooperation  has  been  the  most  marked  of  all 
during  the  war,  but  for  the  present  we  are  only  con- 
sidering the  first  six  months  of  the  year.  This  subse- 
quent development,  which  I  shall  consider  in  its  proper 
place,  did  not  as  yet  make  itself  obvious  in  the  re- 
ports of  the  Wholesale  Society,  in  Moscow,  for  the 
year  19 14.     The  sales  during  that  year  were  a  little 


COOPERATION    DURING   THE   WAR  129 

over  $5,000,000,  as  compared  to  about  $4,000,000  in 
1913,  the  increase  amounting  to  less  than  twenty  per 
cent.  The  Russian  Wholesale  did  not  represent  the 
whole  national  movement,  for  it  was  little  more  than 
a  district  federation.  But  from  all  over  the  country 
came  reports  indicating  that  the  cooperative  societies 
were  growing,  not  only  in  size,  but  in  numbers. 

In  many  municipalities  the  authorities  turned  over 
the  whole  problem  of  food  supply  to  local  societies, 
helping  them  out  with  loans.  One  notable  case  of  this 
kind  was  in  the  Siberian  city  of  Omsk,  where  the  city 
commandeered  store  buildings,  that  the  cooperative  so- 
ciety might  establish  branches  in  all  quarters  of  the 
city. 

From  this  brief  survey  of  the  cooperative  move- 
ment covering  the  year  in  which  the  war  began,  it 
will  be  seen  that  the  outbreak  of  hostilities  had  de- 
cidedly a  stimulating  effect.  That  this  same  stimula- 
tion was  noticeable  to  quite  the  same  degree  in  the 
neutral  countries  will  no  longer  be  surprising,  since 
there,  at  least,  the  members  were  not  drawn  off  into 
the  military  camps. 

Viewing  this  period  in  perspective,  the  cause  will 
at  once  become  obvious.  The  war  threatened  to  in- 
terfere with  the  food  supply.  Scarcity,  to  the  point 
of  famine,  seemed  to  the  people  imminent.  Most 
of  the  available  stores  of  foodstuffs  were  in  the  hands 
of  the  private  dealers.  They,  naturally,  were  not  go- 
ing to  miss  the  opportunity  to  make  what  personal 
profit  they  could  from  the  situation.  They  advanced 
their  prices  to  the  uttermost  point  of  endurance  on 
the  part  of  the  public.  Without  any  reflections  on 
their  moral  qualities  as  persons,  it  was  only  natural 
that  they  should  do  so;  such  action  was  inherent  in 
the  private-trading  system. 


k 


130  COKSUMERS'    COOPERATION 

With  the  cooperative  stores  there  was  no  such  im- 
pulse. As  happened  in  several  of  the  belligerent  coun- 
tries, notably  in  England,  the  cooperatives  also  had 
immense  quantities  of  foodstuffs  on  hand,  either  in 
their  local  warehouses  or  in  the  warehouses  of  the 
wholesale  societies.  But  these  goods  had  passed  out 
of  the  domain  of  capitalist  trade,  or  industry.  They 
were  no  longer  on  the  market.  These  goods  already 
belonged  to  the  members  of  the  movement  as  truly 
as  though  they  already  had  them  stored  away  on  their 
pantry  shelves.  They  had  been  bought  and  paid  for 
out  of  the  working  capital  of  the  societies,  which  con- 
sists of  the  shares  of  the  members.  In  seeming  to 
pay  for  them  over  the  counter,  the  members  were 
merely  making  good  the  deficit  in  the  share  money 
which  the  purchasing  of  the  goods  had  caused.  The 
officials,  or  the  paid  store  clerks,  naturally,  had  neither 
the  right  nor  the  incentive  to  raise  the  price  of  goods 
which  did  not  belong  to  them,  of  which  they  were 
merely  the  custodians.  Thus  the  Cooperators  were, 
unconsciously,  perhaps,  in  the  position  of  people  who 
had  laid  by  provisions  for  some  months  ahead.  The 
tremendous  influx  of  new  members  merely  represented 
the  selfish  desire  on  the  part  of  the  outside  public  to 
share  in  their  good  fortune. 

This  situation,  however,  was  only  peculiar  to  the 
first  few  months  of  the  war.  Even  in  England  and 
Scotland  these  stores  of  goods  were  bound  to  be- 
come exhausted.  The  question  would  then  arise: 
what  happened,  then,  when  the  cooperative  societies, 
on  an  equal  footing  with  the  private  merchants  and 
manufacturers,  must  reach  back  to  original  sources  of 
supply  and  procure  goods  under  the  difficult  condi- 
tions created  by  the  war  ?  By  this  time  a  real  scarcity 
of  foodstuffs  existed  and  the  government  had  to  some 


COOPERATION    DURING   THE   WAR  I3I 

extent  curbed  speculation  and  abnormally  big  profits. 
The  two  systems  would  now  be  on  more  equal  terms. 
It  was  now  that  the  real  test  of  the  comparative  effi- 
ciency of  the  two  systems  would  be  made. 

Fortunately  there  is  no  lack  of  concrete  evidence 
of  the  final  result. 

In  years  previous  to  the  war  the  English  Wholesale 
had  been  increasing  its  trade  at  the  average  rate  of 
about  five  per  cent  a  year.  The  unusual  demands 
made  upon  it  at  the  outbreak  of  the  war  had  sent  its 
sales  up  to  a  ten  per  cent  increase. 

But  in  191 5  its  sales  leaped  up  to  over  $215,000,000, 
an  increase  of  over  $40,000,000,  or  25  per  cent.  The 
Scottish  Wholesale  did  almost  as  well;  its  rate  of 
increase  was  21  per  cent.  Meanwhile,  during  the  year 
another  122,584  householders  had  considered  it  to 
their  advantage  to  join  the  local  societies,  bringing  the 
total  membership  up  to  3,310,724. 

Much  of  this  increase  of  trade  was  undoubtedly  due 
to  higher  prices.  But  during  19 16,  when  high  prices 
had  been  more  or  less  established,  when  government 
regulation  was  in  full  swing  and  scarcity  of  provisions 
must  have  caused  a  tendency  toward  restricted  sales, 
the  rate  of  increase  continued  almost  the  same.  The 
turnover  of  the  English  Wholesale  went  up  past  the 
quarter  of  a  billion  dollar  mark,  to  $261,000,000,  rep- 
resenting a  gain  of  21  per  cent.  The  Scottish  Whole- 
sale beat  its  previous  record,  registering  an  increase  of 
27  per  cent.  And  again  the  record  was  broken  for  in- 
creased membership;  about  200,000  heads  of  families 
had  joined  —  a  million  consumers  —  and  had  brought 
the  total  membership  up  to  over  3,500,000. 

During  the  years  19 17  and  19 18  the  increase  in  the 
yearly  business  of  the  C.  W.  S.  was  at  the  rate  of 
123/2  per  cent  each  year,  bringing  the  total  sales  for 


132  CONSUMERS     COOPERATION 

1918  Up  to  about  $326,000,000.  This  might  seem 
like  a  settling  down  to  normal  conditions,  but  for  the 
fact  that  the  business  for  the  last  half  of  19 18  was 
so  very  much  higher  than  for  the  first  half;  $178,226,- 
000.  This  was  an  increase  of  26  per  cent  over  the 
same  period  the  year  previous;  it  was  more  than  the 
sales  for  the  whole  year  of  1914,  when  the  war  be- 
gan. Obviously  a  scarcity  of  provisions  was  making 
itself  felt.  With  the  signing  of  the  armistice  this 
restraint  was  removed  and  business  made  another 
leap. 

The  volume  of  business  of  the  English  Wholesale 
Society  has  about  doubled  during  the  war. 

As  for  the  increase  in  membership  for  all  of  Great 
Britain,  standing  now  at  about  4,000,000,  that  has 
amounted  to  about  one  million  heads  of  families  dur- 
ing the  war  period.  Which  means  that  close  to  a 
third  of  the  total  population  derives  at  least  a  part  of 
its  necessities  from  the  movement. 

A  peculiar  feature  of  the  development  of  the  British 
movement  during  the  war  has  been  the  increased  acqui- 
sition of  "  original  sources  of  production " ;  land. 
Extensive  purchases  of  tea  estates  were  made  in  Cey- 
lon and  southern  India,  bringing  the  total  acreage  up 
to  over  30,000  acres.  During  191 7  the  two  British 
Wholesale  Societies  bought  10,000  acres  of  wheat 
land  in  Canada,  as  an  experiment  in  wheat  production. 
In  England  the  C.  W.  S.  has  purchased  farm  lands 
very  extensively,  most  of  them  already  laid  out  in 
fruit.  The  extensive  profiteering  (a  word  which,  by 
the  way,  was  first  coined  by  the  cooperative  journal- 
ists) carried  on  in  agricultural  produce  has  led  to 
this  program.  How  successful  these  experiments  in 
consumers'  agricultural  production  have  been  may  be 
judged  from  the  fact  that  during  the  past  few  months 


COOPERATION   DURING   THE  WAR  I33 

the  C.  W.  S.  has  issued  $12,500,000  in  "  development 
bonds,"  all  of  which  have  now  been  sold  to  local  so- 
cieties and  labor  unions,  some  of  the  former  buying  to 
the  extent  of  $250,000,  The  proceeds  of  this  financial 
transaction  will,  as  the  name  of  the  bonds  indicate, 
be  devoted  to  the  development  of  original  sources  of 
production;  in  the  purchase  of  agricultural  lands,  both 
at  home  and  abroad.  This  tendency  on  the  part  of 
the  British  consumers  to  acquire  ownership  of  the 
sources  of  agricultural  production  is,  in  my  opinion, 
the  most  revolutionary  feature  of  cooperative  develop- 
ment which  has  yet  taken  place,  to  which  I  shall  have 
occasion  to  refer  again  in  a  later  chapter. 

Of  the  Continental  countries  I  shall  turn  to  Germany 
first,  third  in  order,  after  England  and  Scotland,  be- 
fore the  war.  The  German  Wholesale  Society,  in 
Hamburg,  had  been  creeping  slowly  up  toward  the 
Scottish  Wholesale,  averaging,  as  it  did,  for  some 
years,  a  20  per  cent  increase.  And  here,  at  first  glance, 
judging  solely  by  the  trade  of  the  Wholesale,  Ger- 
man cooperation  had  suffered  a  decided  setback  dur- 
ing 1915  and  1916,  In  the  former  year  the  falling 
off  had  been  3  per  cent,  in  the  latter   12  per  cent. 

Yet  offsetting  this  is  a  record  of  a  steady  increase 
in  general  membership.  In  19 14  the  membership  of 
the  local  societies  affiliated  with  the  Central  Union 
amounted  to  1,700,000.  In  191 5  about  150,000  new 
members  joined.  In  1916  another  150,000  had  joined, 
bringing  the  total  up  to  about  2,000,000.  And  in  19 17 
there  was  a  further  increase  of  137,000,  This,  in  spite 
of  the  fact  that  during  this  period  nearly  every  able- 
bodied  German  had  been  called  to  the  front. 

As  for  the  local  societies,  their  trade  had  shown 
a  decided  increase.  During  1915— 16  a  hundred  new 
stores,  either  independent  societies  or  branches  of  older 


134  CONSUMERS     COOPERATION 

societies,  had  been  opened,  while  the  volume  of  trade 
during  1916  jumped  from  493,000,000  marks  to  577,- 
000,000  marks,  which  was  exceeded  in  1917,  when 
the  increase  was  30,000,000  marks. 

Turning  again  to  the  Wholesale  Society,  we  find 
that  the  saving  deposits  intrusted  to  its  care  during 
the  first  two  war  years  had  doubled,  rising  from 
22,000,000  marks  to  44,000,000  marks,  its  reserve 
capital  also  being  enlarged  by  over  half  a  million 
marks.  In  191 7  the  deposits  had  increased  to  nearly 
72,000,000  marks.  During  the  year  19 16  the  produc- 
tive departments  had  been  enlarged  and  their  output 
increased  to  the  extent  of  9,000,000  marks. 

Why,  then,  should  its  sales  to  its  own  societies  have 
lessened  ? 

Simply  that  the  Cooperators,  unlike  their  Socialist 
comrades,  had  the  temerity  to  denounce  the  war  as 
"  barbarous  murder  " ;  to  announce  again  and  again, 
at  their  meetings  and  conferences  and  through  their 
official  organs,  that  they  were  absolutely  opposed  to  it. 
The  Socialists  had  been  received  with  open  arms  by  the 
imperial  family.  Not  so  the  Cooperators.  As  a 
measure  of  "  straaf "  the  Imperial  Food  Control 
Board  had  consistently  and  continuously  followed  a 
policy  of  discrimination  against  the  Wholesale  Society 
in  favor  of  its  private  competitors.  The  complaint 
against  this  treatment  rings  through  every  report  and 
was  the  subject  of  a  strong  resolution  of  protest 
passed  by  a  national  congress  held  in  19 17. 

Yet  H.  Kaufmann,  director  of  the  Wholesale  So- 
ciety, finds  it  possible  to  say : 

"Cooperative  development  (in  Germany)  during 
these  war  times  has  achieved  a  victory  such  as  we 
had  not  dared  to  hope  for  and  it  gives  us  the  assur- 
ance that  we  shall  record  still  greater  success  in  the 


COOPERATION    DURING   THE   WAR  1 35 

new  times  which  are  coming  and  which  will  be  rung 
in  by  the  bells  of  peace." 

In  Austria  the  government's  previous  prejudice 
against  cooperation  did  not  blind  it  to  the  great  service 
the  movement  had  been  to  the  people  during  the  trying 
war  times.  Early  in  1916  the  Minister  of  War  called 
together  in  conference  a  number  of  labor  leaders  and 
the  officials  of  the  Austrian  Wholesale  Society.  He 
proposed  that  the  200,000  munition  workers  and  other 
government  employees  in  and  around  Vienna  be  or- 
ganized cooperatively,  under  the  supervision  of  the 
Wholesale  Society,  which  was  accordingly  done. 
Thus  the  Wholesale  Society  was  given  charge  of  the 
victualing  of  575,000  families  in  Vienna.  Distribut- 
ing centers  were  opened  in  the  larger  works,  while 
the  smaller  factories  simply  assigned  their  workers 
to  neighboring  cooperative  stores.  Naturally,  the 
Wholesale  had  some  difficulty  in  adapting  itself  to  this 
sudden  enlargement  of  business,  but  succeeded.  As  an 
illustration,  it  took  over  sixteen  private  baking  plants 
as  annexes  to  the  big  modern  plant  of  the  local  co- 
operative bakery.  Small  wonder,  then,  that  its  in- 
crease in  trade  during  1916  was  at  the  rate  of  73 
per  cent,  as  against  a  13  per  cent  increase  the  year 
before.  In  membership  there  was  the  same  increase 
as  in  other  countries;  in  1914  the  Central  Union  of 
Austrian  Distributive  Societies  reported  298,605  in- 
dividuals affiliated  with  it  through  the  local  societies, 
as  compared  to  367,538  in  1917.  The  present  status 
of  these  same  societies  is  now  unknown,  for  the  rea- 
son that  there  has  been  the  same  disruption  in  the  co- 
operative movement  in  Austria  as  there  has  been  in  the 
political  organization.  These  societies  had  included 
Czechs,  Slovaks,  and  other  nationalities  which,  since 
the  armistice,  have  broken  away  from  the  German- 


136  consumers'  cooperation 

Austrian  societies  and  united  into  separate  national 
groups.  Glowing  reports  have  been  rendered  of  the 
rapid  development  of  the  cooperative  movement  in 
the  Czecho-Slovak  Republic,  but  in  its  case,  naturally, 
there  is  no  past  with  which  to  make  comparisons. 

In  Hungary  the  Wholesale  had,  in  191 5,  established 
four  new  warehouses,  each  in  a  provincial  center,  and 
reported  an  increase  in  turnover  at  the  rate  of  50  per 
cent.  In  19 17  it  did  a  business  of  nearly  88,000,000 
kroner,  as  compared  to  slightly  more  than  30,000,000 
in  1 9 14,  almost  triple.  How  the  Hungarian  Whole- 
sale prospered  during  the  war  period  may  be  judged 
from  the  fact  that  it  contributed  $200,000  toward  the 
establishment  of  a  cooperative  university  in  Budapest. 
Few  other  institutions  in  the  country  were  feeling 
flush  enough  to  assist  education  to  that  extent.  From 
1914  to  1917  the  Wholesale  added  470  societies  to  its 
constituency,  while  its  total  individual  membership 
was  about  300,000. 

As  in  Austria,  so  in  Hungary,  too,  the  cooperative 
movement  has  been  strongly  affected  by  the  political 
situation.  A  recent  dispatch  reports  that  the  Bol- 
shevist Communist  Government,  with  its  program  of 
nationalization,  has  expropriated  the  Hungarian 
Wholesale  and  turned  it  into  a  government  institution, 
thus  destroying  its  cooperative  character  temporarily, 
at  least.  But  this  is  not  likely  to  do  more  than 
check  its  development  for  the  time  being,  and 
when  normal  conditions  are  reestablished,  whatever 
the  form  of  government  adopted  may  be,  the  Whole- 
sale will  undoubtedly  continue  its  onward  march. 

As  already  stated,  cooperation  had  suffered  in 
France  because  of  the  actual  invasion  by  German 
armies,  but  in  spite  of  that  fact  the  French  Whole- 
sale registered  a  tremendous  increase  in  its  business. 


COOPERATION   DURING   THE   WAR  1 37 

In  the  year  ending  July,  191 5,  corresponding  exactly 
with  the  first  war  year,  it  did  a  business  of  9,000,000 
francs ;  a  little  less  than  $2,000,000.  During  the  year 
ending  July,  19 18,  its  sales  amounted  to  42,000,000 
francs,  nearly  double  the  trade  of  the  year  previous. 
Much  of  this  increase  has  been  due  to  the  friendly  at- 
titude of  the  French  Government  toward  cooperative 
enterprises,  which  appointed  Albert  Thomas,  one  of 
the  most  prominent  of  the  cooperative  leaders.  Min- 
ister of  Munitions,  and  encouraged  him  to  establish 
cooperative  societies  wherever  they  could  be  of  benefit 
to  the  munitions  workers  and  the  soldiers.  As  an 
instance,  the  army  canteens  were  all  put  on  a  co- 
operative basis,  as  nearly  as  that  was  possible  under  the 
circumstances,  and  placed  under  the  supervision  of 
the  Wholesale  Society. 

I  shall  now  consider  briefly  a  few  of  the  neu- 
tral countries,  where  development  has  been  no  less 
marked. 

In  Switzerland  the  Wholesale  Society  did  a  busi- 
ness of  a  little  over  45,000,000  francs  in  1914.  Last 
year,  in  191 8,  this  same  institution  had  a  turnover  of 
nearly  130,000,000;  almost  triple.  In  191 5  the  mem- 
bership of  the  affiliated  societies  stood  at  287,704. 
Two  years  later  they  had  increased  to  324,948.  As 
there  are  only  900,000  families  in  Switzerland,  and 
each  cooperative  society  member  represents  a  family,  it 
will  be  seen  that  over  a  third  of  the  population  is  in- 
volved. During  the  war  the  Wholesale,  again  as  the 
result  of  a  boycott,  established  the  biggest  flour  mill 
in  Switzerland,  with  a  weekly  output  of  forty-two 
carloads  of  flour.  There  has  also  been  an  extensive 
purchasing  of  land  for  the  purpose  of  agricultural 
production,  for  in  Switzerland  the  so-called  agricul- 
tural cooperative  societies  are  bitterly  opposed  to  the 


138  consumers'  cooperation 

consumers'  societies  and  discriminate  in  favor  of  the 
private  dealers  in  wholesale  farm  produce. 

Sweden's  Wholesale  Society  did  a  business  in  1914 
of  9,900,000  kroner.  In  191 7  this  had  more  than 
doubled,  and  stood  at  21,800,000  kroner.  In  that 
same  period  the  members  affiliated  to  the  Wholesale 
through  their  local  societies  increased  from  111,000  to 
177,000.  The  Swedish  Wholesale  was  the  only  im- 
porter of  American  bacon  after  the  armistice,  none  of 
the  private  dealers  daring  to  undertake  the  risk. 

Norway's  cooperative  federation  was  weak  in  19 14; 
only  3,200  members  were  affiliated.  But  in  19 17  this 
number  had  increased  to  60,000.  In  19 14  the  Whole- 
sale's trade  was  3,000,000  kroner.  In  1917  it  was 
over  8,000,000. 

On  June  i,  1919,  the  Union  of  Dutch  Workers'  Co- 
operative Societies  reported  a  membership  of  48,768, 
as  compared  to  42,449  a  year  before.  In  19 14  this 
organization,  which  is  only  one  of  three  unions  of 
consumers'  societies,  had  a  membership  of  26,695. 
Which  means  that  this  organization  doubled  its  mem- 
bership during  the  war. 

During  191 8  the  four  northern  countries,  Norway, 
Sweden,  Denmark,  and  Finland,  cooperated  in  the 
establishment  of  an  international  wholesale  society, 
which  began  at  once  an  importing  business  for  the  Co- 
operators  of  the  four  countries  affiliated,  with  head- 
quarters in  Copenhagen. 

Russia  I  have  left  to  the  last;  so  extensively  has  co- 
operation developed  there  that  the  Russian  movement 
stands  apart  from  the  movements  in  all  the  other  Eu- 
ropean countries.  It  constitutes  to-day  practically  the 
economic  and  industrial  system  of  all  that  part  of 
Russia  under  Soviet  rule. 

Various  distinct  causes  contributed  to  this  abnormal 


COOPERATION   DURING   THE   WAR  1 39 

development.  In  the  early  years  of  the  war,  even 
under  the  autocratic  regime,  the  cooperative  societies 
attracted  wide  attention  by  their  ability  to  handle  the 
food  problems,  not  only  for  the  civil  population,  but 
for  the  armies  at  the  front.  The  government,  whose 
administrative  machinery  proved  entirely  inadequate 
for  this  function,  was  compelled  to  assign  various 
social  organizations  to  this  task,  such  as  the  zemstvos, 
the  federation  of  municipalities,  and  similar  bodies. 
Among  these  were  the  cooperatives,  and  they  proved 
themselves  the  most  efficient.  In  the  exercise  of  this 
public  function  of  food  supply  they  waxed  strong. 

Then  came  the  revolution. 

"  On  what  basis  will  the  economic  organization  of 
the  new  Russia  be  founded?"  a  correspondent  asked 
the  Premier,  Alexander  Kerensky,  as  reported  by  the 
New  York  Vorwdrts,  in  New  York  City,  whose  editor, 
Abraham  Cahan,  has  always  been  a  bitter  opponent  of 
cooperation. 

"  Study  our  cooperative  organizations,"  replied  the 
Premier,  "  and  you  will  know.  The  basis  is  already 
there." 

In  the  Kerensky  Cabinet  the  Minister  of  Trade  and 
Commerce,  the  Assistant  Minister  of  Supplies,  the 
Assistant  Minister  of  Labor,  the  Minister  of  Posts  and 
Telegraphs  and  the  Minister  of  Public  Relief  were  all 
appointed  on  account  of  their  experience  as  leaders  in 
the  cooperative  movement. 

During  Kerensky's  regime  cooperation  made  rapid 
strides  ahead,  for  every  encouragement  was  given  it. 
During  191 8  there  were  about  20,000  consumers'  so- 
cieties throughout  the  country,  with  a  membership 
of  about  15,000,000  heads  of  families. 

The  trade  done  by  the  Wholesale  Society,  in  Mos- 
cow, though  it  covers  only  a  part  of  the  field,  gives 


140  CONSUMERS     COOPERATION 

some  idea  of  the  rapid  growth.  In  19 13  it  did  a  busi- 
ness of  only  $4,000,000,  less  than  the  Wholesale  of 
little  Finland  was  doing.  The  first  year  of  the  war 
showed  an  increase  of  only  a  little  over  a  million. 
But  during  191 5  this  turnover  was  more  than  doubled, 
rising  to  $12,500,000.  In  1916  the  volume  of  trade 
made  a  flying  leap  up  to  $45,000,000,  bringing  Russia 
up  past  Germany,  third  in  order,  after  England  and 
Scotland.  In  19 17  the  sales  rose  to  $75,000,000. 
Last  year,  during  19 18,  its  turnover  was  2,000,000,000 
rubles,  which  would  be  a  billion  dollars  at  the  normal 
rate  of  exchange,  but  is  now  equal  to  about  $400,000,- 
000. 

No  less  impressive  are  the  figures  for  the  central 
bank  of  the  Russian  movement ;  the  Moscow  Narodni 
Bank.     This  institution  deserves  special  mention. 

Unlike  the  bank  of  the  English  Cooperative  Whole- 
sale Society,  the  Narodni  Bank  is  a  separate  establish- 
ment. In  191 2  it  was  founded  on  much  the  same 
basis  as  a  private  bank,  with  this  important  difference : 
that  only  cooperative  societies  could  buy  its  shares 
of  stock,  or  make  deposits  with  it,  while  the  bank  it- 
self only  made  loans  or  granted  credit  to  cooperative 
societies. 

In  19 1 3,  when  it  had  been  in  business  only  a  year, 
the  Narodni  Bank  had  a  turnover  of  $28,000,000. 
This  doubled  in  19 14.  In  191 5  the  turnover  doubled 
again,  rising  to  $120,000,000.  In  1916  it  mounted 
to  over  a  billion  rubles.  And  then  came  the  big  leap ; 
up  to  nearly  six  billion  rubles,  over  a  billion  dollars,  at 
the  present  rate  of  exchange. 

When  the  Bolsheviki  came  into  power  the  leaders 
of  the  cooperative  organizations  were  decidedly  op- 
posed, and  voiced  their  opposition  so  strongly  that 
many  of  them  were  arrested  and  the  Narodni  Bank 


COOPERATION    DURING   THE   WAR  I4I 

was  in  the  hands  of  the  Red  Guards  for  several  weeks. 
This  opposition  has  since  died  down  to  a  somewhat 
sullen  "  neutrality,"  though  it  cannot  be  denied  that 
the  same  old  opposition  is  still  there.  The  Soviet  has 
the  armed  forces  of  the  country  and  the  jails  behind  it. 

But,  as  Lenin  found  out  very  soon,  the  Soviet  it- 
self was  economically  dependent  on  the  cooperative 
movement.  The  factory  committees  which  attempted 
to  carry  on  the  industrial  plants  from  which  the  Soviet 
had  driven  the  private  owners  proved  dismal  failures. 
The  regional  committees,  based  on  a  somewhat  broader 
class  foundation,  were  no  more  successful.  So  the 
factories  were  turned  over  to  the  well-organized  con- 
sumers' societies,  already  operating  a  number  of  such 
establishments.  The  local  food  distributing  commit- 
tees established  by  the  Soviets  proved  hardly  more 
competent,  and  again  the  cooperatives  were  appealed 
to. 

Lenin  found  that  he  must  compromise  with  the  Co- 
operators.  Indeed,  his  whole  scheme  of  industrial 
organization  must  be  decidedly  modified  from  his  mix- 
ture of  state  Socialism  and  Syndicalism,  in  the  direc- 
tion of  practical  cooperation.  The  Red  Guards  were 
taken  out  of  the  premises  of  the  Narodni  Bank  and 
that  institution  was  allowed  its  full  independence  again, 
though  every  other  bank  in  the  country  was  taken  over 
by  the  Soviet.  Special  laws  were  passed  favoring 
the  cooperative  enterprises.  It  was  not  till  the  latter 
part  of  1918  that  the  Narodni  Bank  was  finally  "  na- 
tionalized," but  this  was  really  in  the  nature  of  a  com- 
promise, for  this  action  has  in  no  substantial  detail 
affected  the  independence  of  the  institution,  which  con- 
tinues business  under  its  old  Board  of  Directors,  whose 
decisions  are  only  nominally  subject  to  the  approval  of 
the  Banking  Commissars  of  the  Soviet. 


142  CONSUMERS     COOPERATION 

"  Lenin  himself  was  present  at  the  conference  at 
which  this  compromise  was  affected,"  one  of  the  bank's 
directors  told  me.  "  '  You  know,'  he  said  to  us,  *  I 
never  compromise.'  He  looked  us  straight  in  the  eye, 
then  a  smile  broke  out  about  his  mouth,  and  he  added, 
*  Except  with  you  cooperators.'  " 

To-day,  according  to  statistics  published  in  the  Rus- 
sian Cooperator  for  April,  19 19,  the  official  organ  of 
the  Russian  cooperative  office  in  London,  the  Central 
Union  of  Russian  Consumers'  Societies  comprises, 
within  Central  Russia,  244  cooperative  unions,  num- 
bering 8,876,263  individual  members,  representing 
36,000,000  persons,  representing  48  per  cent  of  the 
total  population  of  the  territory  under  consideration. 
Another  15,000,000  persons  are  further  served  by  the 
cooperative  institutions,  making  altogether  over  51,- 
000,000  persons  out  of  a  total  population  of  76,- 
000,000. 

The  same  article  in  which  these  figures  are  quoted 
then  goes  on  to  describe  the  working  basis  on  which 
the  Soviet  Government  and  the  cooperative  organiza- 
tion cooperate  in  distributing  the  foodstuffs  among 
the  population. 

The  Central  Soviet  in  Moscow  controls  the  food 
supply.  Every  month  the  central  cooperative  organ- 
ization in  Moscow,  the  Central  Union  (or  Wholesale 
Society),  informs  the  Soviet  of  the  number  of  con- 
sumers its  constituent  societies  have  supplied  in  the 
different  provinces.  This  gives  the  proportion  of  the 
population  procuring  supplies  from  the  cooperatives. 
Figuring  on  this  basis,  the  Soviet  turns  over  to  the 
Central  Cooperative  Union  a  corresponding  percentage 
of  the  goods  to  be  distributed  to  the  people  in  those  dis- 
tricts. The  rest  is  handed  over  to  the  food  committees 
of  the  local  Soviets,  for  there  is  now  no  private  trade 


COOPERATION    DURING    THE   WAR  143 

in  Central  Russia.  In  August  and  July,  19 18,  the 
Soviet  Government  turned  over  65  per  cent  of  its 
food  supplies  for  distribution  to  the  Central  Coopera- 
tive Union.  In  sixteen  of  the  thirty-seven  govern- 
ments, or  provinces,  involved,  the  cooperatives  were 
assigned  the  task  of  distribution  exclusively.  It  will 
thus  be  seen  that  the  cooperative  system  is  now  fast 
becoming  universal  in  Central  Russia ;  that  unless  out- 
side interference  should  divert  natural  tendencies,  co- 
operation will  soon  control  the  economic  life  of  the 
country  entirely. 

Already  before  the  Bolsheviki  came  into  power  the 
Central  Union  of  Russian  Cooperative  Societies  had 
established  a  branch  in  London.  A  few  months  ago 
a  similar  office  was  established  in  New  York  City, 
where  it  covers  a  whole  floor  of  a  modern  downtown 
office  building.  The  purpose  of  this  agency,  known 
officially  as  the  American  Committee  of  the  Russian 
Cooperative  Unions,  is  to  persuade  the  United  States 
Government  to  permit  trade  between  American  manu- 
facturers and  the  cooperatives  of  Soviet  Russia. 
Through  this  office  heavy  purchases  had  already  been 
made  for  shipment  to  the  Siberian  cooperative  socie- 
ties. And  now,  at  the  present  writing,  comes  the 
news  that  the  United  States  Government  has  sold  to 
this  committee  meat  and  clothing  from  its  surplus 
army  supplies  for  shipment,  presumably  to  Moscow, 
to  the  value  of  $15,000,000. 

I  think  I  have  presented  enough  dry  figures  and  facts 
to  convince  the  most  skeptical  that  consumers'  coopera- 
tion has  now  become  an  economic  force  throughout 
all  of  Europe  which  must  seriously  be  considered  as 
a  possible,  even  a  probable,  successor  to  private  trade 
and  industry,  in  the  natural  course  of  that  evolu- 
tion  which   makes   for  the  progress  of   civilization. 


k 


144  CONSUMERS     COOPERATION 

Continuing  its  onward  march,  not  at  the  rate  with 
which  it  has  advanced  during  the  five  years  of  the 
war,  but  at  the  normal  speed  with  which  it  was  travel- 
ing before  the  war,  it  must  inevitably  acquire  a  domi- 
nating position  in  world  industry  within  a  very  few 
years. 

Truly,  efforts  may  indeed  be  made  by  the  support- 
ers of  the  present  order  to  check  its  course,  to  sup- 
press it.  There  are  marked  indications  of  such  a  con- 
certed movement  on  the  part  of  large  industrial  groups 
in  Great  Britain  at  the  present  time.  But  such  ef- 
forts have  always  failed  in  the  past,  and  there  is  no 
reason  to  suppose  that  the  British  Cooperators,  repre- 
senting almost  a  third  of  the  population,  and  with  a 
mighty  economic  weapon  in  their  hands,  have  not 
the  capacity  or  the  strength  to  meet  each  move  made 
against  them,  step  by  step.  Capitalism  has  never  yet 
struck  cooperation  one  telling  blow.  Indeed,  capital- 
ism, at  the  present  time,  has  more  reason  than  ever  to 
tread  softly  over  the  toes  of  the  masses.  Never,  at 
any  time  during  the  past,  has  it  stood  in  such  fear  of 
that  danger  which  it  chooses  to  call  Bolshevism.  Nor 
can  there  be  any  doubt  that  if,  by  legislative  means, 
the  capitalist  class  did  succeed  in  blocking  the  course 
of  natural  evolution,  which  in  industry  is  cooperation 
itself,  there  could  be  no  other  result  than  —  Bolshe- 
vism. 


CHAPTER  XII 

COOPERATION    IN    THE   UNITED   STATES 

To  the  practical  American,  assuming  that  he  has 
read  the  foregoing  outline  of  the  international  co- 
operative movement,  the  question  will  at  once  arise: 
how  does  this  affect  us?  Are  we  to  expect  extensive 
cooperative  organization  in  this  country  ? 

To  which,  of  course,  there  is  no  decided  answer. 
Studying  the  facts  as  they  are  at  present,  both  at  home 
and  abroad,  we  can  only  attempt  to  present  the  basis 
for  speculation  not  entirely  woven  out  of  dreams  and 
idealistic  theories.  But  these  facts  are  worth  study- 
ing.    There  is  enough  material  available. 

As  a  matter  of  fact,  cooperation  appeared  in  this 
country  as  early  as  in  any  of  the  Continental  countries, 
and  before  it  appeared  in  Russia,  where  it  has  since 
developed  so  remarkably.  Nor  can  it  be  said  that  it 
has  failed  here  more  than  elsewhere;  rather,  it  has 
languished,  as  though  waiting  for  the  conditions 
propitious  for  its  growth.  Again  and  again  waves  of 
enthusiasm  for  cooperation  have  swept  over  sections 
of  the  country,  to  subside  again,  though  never  to  re- 
cede entirely.  So  it  was  in  the  older  countries,  too. 
Indeed,  it  may  be  said  that  in  the  early  attempts  at  or- 
ganization in  this  country  more  of  a  social  spirit  was 
shown  among  the  people  concerned :  there  was  less 
tendency  toward  local  isolation.  For  the  local  societies 
federated  before  they  had  attained  a  firm  basis  as 
units. 

As  far  back  as  1844  a  tailor  in  Boston,  John  G. 

145 


b 


146  consumers'  cooperation 

Kaulback,  organized  a  cooperative  buying  club  which, 
a  year  later,  became  the  first  cooperative  society  about 
which  was  formed  a  federation  known  as  the  Work- 
ingmen's  Protective  Union.  In  1849  ^^is  organiza- 
tion changed  its  name  to  the  New  England  Protective 
Union,  by  which  time  it  comprised  over  a  hundred  divi- 
sions, as  the  local  societies  were  called,  83  of  which 
reported  a  membership  of  5,109,  with  working  capital 
amounting  to  more  than  $70,000  and  sales  consider- 
ably over  half  a  million  a  year.  Within  the  next  three 
years  the  number  of  local  divisions  had  increased  to 
403,  of  which  67  reported  a  capital  stock  of  a  quarter 
of  a  million  dollars. 

Then  came  internal  quarrels,  followed  by  a  split  and 
the  organization  of  the  American  Protective  Union. 
This  latter  organization  also  developed  with  remark- 
able rapidity,  until  in  1857  its  local  stores  were  doing 
a  yearly  business  of  $300,000  throughout  ten  states, 
most  of  them  in  Massachusetts.  Altogether  as  many 
as  seven  hundred  stores  were  established  throughout 
New  England  and  were  scattered  as  far  as  Illinois  and 
Canada.     Some  few  of  them  survive  to  this  day. 

But  shortly  before  the  Civil  War  a  marked  decline 
set  in.  Whether  the  organization  might  later  have 
picked  up  again  is  doubtful,  but  at  any  rate  when  the 
Civil  War  broke  out  it  went  completely  to  pieces 
largely  through  the  enlistment  of  its  members. 

Its  temporary  success  was  probably  due  to  the  cen- 
tralization which  marked  its  form  of  organization, 
without  which  this  early  attempt  would  have  been 
little  more  noticed  than  similar  attempts  in  other 
countries.  But  against  the  advantages  of  federation 
were  set  various  handicaps.  First,  the  movement  tied 
itself  down  with  outside  matters,  notably  prohibition. 
All  members  were  obliged  to  pledge  themselves  not 


COOPERATION    IN    THE    UNITED  STATES  I47 

to  touch  alcoholic  liquors,  which  limited  its  develop- 
ment to  people  of  this  way  of  thinking.  This  alone 
might  account  for  ultimate  failure,  for  no  cooperative 
movement  has  ever  succeeded  which  has  weighted  it- 
self down  with  issues  not  strictly  pertaining  to  co- 
operation itself. 

Nor  were  these  early  stores  conducted  on  Rochdale 
principles.  Goods  were  sold  at  as  near  cost  as  pos- 
sible, a  practice  which  experience  has  shown  to  be 
impracticable.  Finally,  the  organization  also  under- 
took to  judge  the  "  moral  character "  of  all  appli- 
cants for  membership.  Modern  cooperation  does  not 
attempt  to  set  up  standards  for  personal  conduct. 

The  next  wave  of  cooperation  which  rose,  after  the 
Civil  War,  swept  over  a  much  wider  territory;  from 
Maine  down  to  Texas  and  westward  to  the  foot  of  the 
Rockies,  though  it,  too,  had  its  inception  in  New  Eng- 
land. 

During  the  early  seventies  the  Grangers,  more  prop- 
erly the  Patrons  of  Husbandry,  a  farmers'  order,  es- 
tablished a  number  of  local  cooperative  stores,  and  to 
this  day  the  grangers'  stores  are  not  unknown  in  the 
country.  I  shall  not  dwell  on  their  cooperative  efforts 
for,  even  where  they  have  carried  them  out  on  the  true 
Rochdale  principles,  their  cooperation  has  always  been 
incidental  to  other  interests.  They  have  never  consti- 
tuted any  real  cooperative  movement  and  would  not 
be  likely  to  join  one.  Theirs  is  a  purely  utilitarian 
manifestation  and  without  any  potential  possibilities. 

But  it  was  the  local  enterprises  of  these  early 
Grangers  which  inspired  a  truly  cooperative  organiza- 
tion: the  Sovereigns  of  Industry,  founded  in  1874,  and 
open  to  all  persons,  regardless  of  occupation. 

The  expressed  purpose  of  the  order,  as  indicated  in 
its  constitution,  was  to  check,  by  peaceful  means,  the 


148  consumers'  cooperation 

advance  of  predatory  capitalism  and  to  establish  an 
industrial  system  based  on  equity.  Reading  their 
literature  at  this  day,  with  a  full  knowledge  of  the 
trend  of  the  modern  movement  abroad,  it  is  surprising 
what  an  advanced  stand  the  leaders  of  this  movement 
took.  At  the  time  they  were,  in  spirit,  far  ahead  of 
the  Cooperators  of  Europe,  with  the  possible  exception 
of  that  group  supporting  the  English  Wholesale  So- 
ciety. 

The  Sovereigns  spread  over  the  states  of  the  Atlantic 
seaboard,  from  Maine  down  to  Maryland,  though  they 
continued  being  most  numerous  in  the  North.  Like 
the  earlier  Protective  Union,  the  organization  com- 
prised local  groups,  known  as  "  councils,"  each  of 
which  engaged  in  cooperative  buying.  Some  never 
developed  beyond  the  stage  of  buying  clubs,  which 
elected  buying  agents,  who  bought  on  weekly  orders. 
But  about  half  of  the  councils  eventually  opened 
stores. 

The  system  on  which  they  worked  was  rather  pe- 
culiar, though  quite  democratic  in  form  and  spirit. 
The  local  councils  invited  loans  from  their  individual 
members,  from  each  according  to  his  means.  This 
money  was  utilized  as  the  working  capital  of  the  en- 
terprise. Where  possible,  several  neighboring  coun- 
cils worked  together  in  establishing  a  store,  each  coun- 
cil participating  in  the  management  in  proportion  to 
its  investment,  having  one  representative  on  the  board 
of  management  for  every  hundred  dollars,  this  dele- 
gate being  elected  by  the  council  at  large.  A  seven 
per  cent,  interest  was  paid  on  capital;  the  stores  re- 
stricting their  sales  to  members  of  the  order  and  at 
prices  calculated  to  allow  a  profit  of  about  two  and  a 
half  per  cent.  Half  of  this  surplus  went  to  a  sinking 
fund,  the  other  half  went  into  the  treasuries  of  the 


COOPERATION    IN   THE   UNITED   STATES  149 

councils.  Such  was  their  plan  in  the  beginning,  but 
later  the  Rochdale  plan  was  almost  universally  adopted. 

Within  two  years  after  its  founding  the  order  had 
attained  a  membership  of  30,000.  The  most  notable 
store  established  in  connection  with  this  organization 
was  the  enterprise  founded  by  the  councils  in  Spring- 
field, Mass.,  whose  members  numbered  3,000  and 
whose  sales  in  1876  amounted  to  $135,000.  But  its 
prosperity  was  short-lived,  and  finally,  in  1879,  it 
failed,  the  chief  cause  of  failure  obviously  being  bad 
business  management.  As  an  instance,  when  the 
monthly  trade  of  the  store  amounted  to  about  $5,000, 
two  clerks  and  one  team  for  delivery  were  found  suf- 
ficient; when  this  trade  had  been  merely  doubled,  ten 
clerks  and  six  teams  were  employed.  Again,  bad 
judgment  was  shown  in  buying,  a  lot  of  clothes  and 
hats  of  fashionable  cut  being  put  in  stock,  with  the  re- 
sult that  they  had  to  be  sold  later  at  a  big  loss. 

The  decline  of  the  Sovereigns  was  as  rapid  as  their 
rise.  By  the  end  of  the  seventies  they  had  practically 
disappeared,  though  some  of  their  stores  survived  as 
independent  units. 

Meanwhile,  organized  labor,  in  the  form  of  the 
Knights  of  Labor,  had  also  taken  up  the  cause  of  co- 
operation. The  leaders  of  this  organization  seem  to 
have  had  a  full  appreciation  of  the  broad,  social  sig- 
nificance of  cooperation.  But  unfortunately  the 
Knights  were  primarily  a  labor  union,  and  as  already 
indicated,  cooperation  tolerates  no  matrimony.  In 
double  harness  it  never  thrives,  no  matter  how  sympa- 
thetic a  mate  it  may  have.  The  Knights  established 
and  supported  many  stores  throughout  the  country, 
extending  them  as  far  West  as  Kansas.  But  when 
the  national  organization  collapsed,  the  enterprises  it 
had  initiated  mostly  ceased  with  it. 


h 


150  CONSUMERS     COOPERATION 

During  the  nineties  and  the  early  years  of  the  new 
century  cooperation  seemed  dead  in  the  United  States. 
Here  and  there  might  be  found  some  isolated  store, 
organized  by  immigrants,  who  knew  the  movement 
from  home.  The  few  big  enterprises  surviving  from 
the  early  movements  were  purely  commercial  in  spirit 
and  continued  on  the  Rochdale  plan  from  habit  rather 
than  from  any  feeling  of  idealism.  Nowhere,  during 
this  period,  was  there  any  sign  of  an  expansive  propa- 
ganda with  social  ideals,  with  a  general  program. 

Then,  around  the  beginning  of  the  century,  coopera- 
tive stores  began  appearing  in  California  in  the  rural 
districts.  At  first  these  isolated  societies  did  not  ap- 
pear in  any  way  animated  by  idealism.  The  rank  and 
file  seemed  inspired  by  no  other  motive  than  economy. 
But  when  some  dozens  of  these  societies  were  flourish- 
ing, certain  leading  spirits  organized  the  "  Rochdale 
Wholesale  Company,"  a  sort  of  a  central  purchasing 
agency,  with  headquarters  in  San  Francisco.  Even- 
tually nearly  a  hundred  stores  were  connected  with 
this  central  institution,  though  it  does  not  appear  to 
have  been  in  the  nature  of  a  real  federation.  For  a 
while  there  was  some  discussion  over  a  plan  whereby 
the  management  of  the  local  stores  should  proceed 
from  the  one  head,  on  the  principle  of  the  modern  chain 
stores.  There  is,  apparently,  something  in  this  idea  of 
centralization  that  appeals  to  the  American  character, 
for  centralization  had  been  a  feature  of  the  earlier 
New  England  movements. 

But  before  any  general  plan  could  be  considered 
these  California  stores  began  failing,  one  after  another, 
or  in  bunches,  in  fact.  A  general  decline  set  in  and 
finally,  about  eight  or  nine  years  ago,  low-water  mark 
was  reached  with  only  about  twenty  stores  in  existence 
in  the  state. 


COOPERATION    IN    THE    UNITED   STATES  I5I 

*'  The  cause  of  failure,"  writes  Ernest  O.  F.  Ames, 
one  of  the  leaders  and  president  of  the  Pacific  Co- 
operative League,  an  existing  organization,  "  was  lack 
of  business  management,  extension  of  credit,  lack  of 
educational  work,  absence  of  auditing  or  any  system- 
atic bookkeeping  —  all  due  to  inexperience.  The 
stores  succeeded  at  first  because,  up  to  fifteen  years 
ago,  almost  any  kind  of  business  could  succeed  in  Cali- 
fornia. In  the  country  towns,  where  the  Rochdale 
stores  were  located,  the  farming  population  was  a 
growing  and  a  prosperous  one." 

The  present  Pacific  Cooperative  League,  incorpo- 
rated in  191 3,  represents  an  effort  to  save  the  surviv- 
ing remnants  of  the  movement  and  to  promote  it  on  a 
sounder  basis.  From  191 3  there  has  been  a  gradual 
but  healthy  progress  in  the  business  transacted. 
Already  some  of  the  buying  clubs  have  opened  stores. 
Most  promising  is  the  intelligent  character  of  the 
leadership. 

Strong  emphasis  is  put  on  education;  on  imparting 
to  the  rank  and  file  a  practical  and  theoretical  knowl- 
edge of  cooperation,  without  which  no  movement  can 
hope  to  attain  success. 

Another  general  movement  was  started  in  the 
Northwest,  some  ten  or  fifteen  years  ago,  centering 
about  Minneapolis,  Minn.,  where  a  propaganda  society, 
known  as  the  Right  Relationship  League,  attempted 
to  create  a  federation.  This  stimulus  was  entirely 
from  private  individuals  and  was  by  them  financed. 
The  League  sent  organizers  out  over  the  surrounding 
territory  and  organized  quite  a  number  of  cooperative 
societies  in  the  rural  districts  and  the  larger  towns. 
An  organ.  Cooperation,  was  published  to  support  these 
efforts  and  to  spread  a  knowledge  of  cooperative  prin- 
ciples among  the  people.     The  result  was  that  several 


152  CONSUMERS     COOPERATION 

hundred  stores  were  actually  established  in  this  section, 
most  of  which  are  still  prospering. 

But  only  four  years  ago  the  Right  Relationship 
League  gave  up  its  efforts,  discouraged  by  lack  of  real 
success.  Apparently  it  had  not  found  the  material  of 
which  social  movements  are  built.  At  any  rate,  the 
store  societies  showed  no  ambition  beyond  local  suc- 
cess. The  several  efforts  made  toward  federating 
them  were  absolutely  futile.  Apparently,  like  the 
grange  stores,  the  members  were  composed  of  farmers 
emphasizing  selling,  rather  than  buying.  Unfortu- 
nately, too,  the  League  attempted  to  straddle  two 
steeds  that  will  not  pull  together :  Consumers'  Cooper- 
ation and  agricultural  cooperation. 

In  1907  there  began,  in  New  York  City,  what  pres- 
ently became  a  very  self-conscious  movement,  pros- 
pering very  little  in  the  city  itself,  but  spreading  the 
idea  over  surrounding  territory.  In  that  year  a  small 
society  was  founded  in  the  Bronx  section  of  the  city, 
composed  only  of  some  dozens  of  members.  Having 
opened  its  store  with  a  capital  of  less  than  a  hundred 
dollars,  just  before  the  panic,  it  failed.  Nevertheless, 
one  of  the  members,  Hyman  Cohn,  a  Jewish  salesman 
with  the  spirit  of  the  ancient  prophets,  carried  the  idea 
down  into  the  Jewish  East  Side.  Organizing  the  Co- 
operative League,  little  more  than  a  fictitious  organiza- 
tion in  the  beginning,  he  carried  on  a  tireless  propa- 
ganda for  years,  largely  alone;  often  he  was  the  only 
one  to  answer  the  roll  call  at  the  "  meetings  "  of  the 
League.  So  persistent  was  his  propaganda,  how- 
ever, that  he  gradually  became  known  to  all  the  radical 
elements  in  the  Jewish  quarter  as  "  Cooperative 
Cohn." 

Persistence  brought  its  due  results.  In  191 1  the 
Cooperative  League  had  some  three  hundred  dollars 


COOPERATION    IN    THE   UNITED   STATES  1 53 

in  its  treasury,  though  its  active  members  numbered 
still  less  than  a  dozen.  Then  a  hat  store  was  opened 
in  Delancey  Street,  a  fairly  large  stock  being  procured 
on  the  credit  of  one  of  the  members. 

The  novelty  of  the  enterprise  seemed  to  appeal  to 
the  popular  imagination  on  the  East  Side,  for  the  hat 
store  was  a  tremendous  success.  The  League  sud- 
denly found  itself  with  quite  a  little  capital  on  hand, 
for  the  purchasers  would  not  bother  to  collect  the  re- 
bate on  the  purchase  of  a  hat  or  two.  The  enthusiasm 
of  Cohn  and  his  little  group  was  fired  to  white  heat 
by  this  initial  success  —  with  the  inevitable  result. 
The  second-hand  machinery  of  a  small  hat  factory  was 
purchased,  "  on  terms,"  of  course,  and  the  Cooperative 
League  embarked  on  cooperative  production.  At  least 
it  had  the  distinction  of  establishing  the  first  con- 
sumers' cooperative  productive  plant  in  this  country. 

But  the  basic  business  principle  of  consumers'  co- 
operative production  is  to  establish  your  factory  only 
when  the  market  for  its  output  has  been  organized. 
The  members  of  the  League  numbered  only  some  three 
hundred,  and  each  of  those  would  want  no  more  than 
one  or  two  hats  a  year.  The  factory,  small  though  it 
was,  occupying  a  loft,  must  turn  out  some  hundreds 
of  thousands  of  hats  a  year  to  make  it  pay  its  own 
upkeep. 

To  meet  this  situation  three  other  hat  stores  were 
opened,  and  each  store  added  a  "  gent's  furnishing  " 
department  to  its  hats.  But  what  active  sympathy 
there  was  in  the  Jewish  quarter  for  the  League  had 
concentrated  on  the  first  store  in  Delancey  Street. 
The  other  stores  could  not  be  made  to  pay  expenses. 
The  original  store  continued  to  prosper,  and  for  over 
a  year  carried  on  its  back  the  losses  from  the  other 
stores  and  the  factory. 


154  consumers'  cooperation 

Eventually  the  organizers  realized  their  blunder  and 
shortened  sail  rather  skillfully,  until  the  factory  and 
the  three  losing  stores  were  disposed  of.  This  con- 
traction of  enterprise,  however,  had  its  natural  influ- 
ence on  the  people :  added  to  it  was  the  bitter  oppo- 
sition of  the  Jewish  Socialist  daily,  Vorw'drts,  whose 
editor  belonged  to  the  old  school  of  Socialism  and 
feared  this  diversion  of  radical  energy  into  other  chan- 
nels. New  members  ceased  applying.  Finally  the 
League  was  reorganized  into  the  present  Industrial 
and  Agricultural  Cooperative  Association,  which  owns 
and  operates  two  restaurants,  two  boarding  houses,  and 
a  butcher  shop,  its  yearly  pay  roll  amounting  to  about 
twenty  thousand  dollars  a  year.  Up  to  the  present  it 
has  been  showing  all  the  signs  of  success. 

I  have  given  the  above  organization  rather  more 
space  than  it  seems  to  deserve,  but  it  had  a  lasting  in- 
fluence which  spread  far  from  its  source. 

The  Cooperative  League,  though  never  possessed  of 
other  funds  than  were  subscribed  by  the  dues  of  its 
members  or  were  taken  from  its  early  profits,  was 
thoroughly  modern  in  its  viewpoint  and  spirit. 
Moreover,  it  carried  on  a  propaganda  away  from  its 
own  immediate  vicinity  from  which  it  could  hope  for 
no  immediate  results,  much  less  benefits.  As  an  in- 
stance, it  sent  a  delegate  to  the  National  Socialist  Con- 
vention, held  in  Indianapolis  in  1912,  with  the 
result  that  this  body  indorsed  the  cooperative  move- 
ment and  appointed  a  special  committee  to  study 
it.  Henceforward  all  active  opposition  on  the  part 
of  Socialists  was  silenced,  and  even  the  Vorw'drts 
was  reduced  to  a  merely  passive  resistance.  The 
national  committee  of  the  Socialist  party  then 
established  a  bureau  for  information  on  coopera- 
tion in  Chicago,   and  though   the  information  here 


COOPERATION    IN    THE    UNITED   STATES  1 55 

dispensed  had  all  the  earmarks  of  the  early  Christian 
Socialist  literature  on  the  subject,  it  did  lead  to  many 
cooperative  societies  being  organized  all  over  the  coun- 
try by  Socialists.  Aside  from  this,  the  Cooperative 
League  published  many  pamphlets  and  leaflets,  in  Eng- 
lish as  well  as  in  Yiddish,  and  these  were  productive  of 
some  concrete  results.  Many  of  the  cooperative  socie- 
ties in  New  Jersey  were  indirectly  the  offspring  of  the 
League. 

The  Cooperative  League  was  undoubtedly  the  first 
democratic  cooperative  organization  to  carry  on  a  gen- 
eral propaganda  in  this  country. 

From  it,  too,  though  indirectly,  through  individuals 
who  had  been  active  in  its  efforts,  sprang  the  Con- 
sumers' Cooperative  Union  of  New  Jersey,  which 
founded  what  is  now  the  only  organ  of  Consumers' 
Cooperation  in  this  country.  The  Union  was  an  at- 
tempt to  establish  a  cooperative  union,  such  as  those 
existing  in  European  countries.  But  it  was  only  an 
embryo.  Less  than  half  a  dozen  organizations  sup- 
ported it  as  members ;  there  was  a  continuous  deficit  in 
the  publication  of  the  Cooperative  Consumer,  most  of 
which  the  printer  stood. 

Finally,  in  191 6,  there  was  organized  the  Co- 
operative League  of  America,  a  propaganda  body 
backed  by  private  individuals,  but  with  its  doors  open 
to  cooperative  societies  on  a  federative  basis. 

This  organization  has  since  developed  as  the  back- 
bone of  the  propaganda  for  cooperation  in  this  coun- 
try. It  has  had  a  powerful  influence,  not  only  in 
stimulating  with  its  literature  the  organization  of  new 
societies,  but  in  bringing  the  existing  societies  together 
into  a  national,  cohesive  body,  conscious  of  its 
own  significance  and  ultimate  aims.  Its  president, 
Dr.  James  P.  Warbasse,  may  rightfully  be  regarded  as 


156  consumers'  cooperation 

the  American  Vansittart  Neale,  with  the  important  ex- 
ception that  he  accepts  the  lessons  taught  by  the  past 
experience  of  cooperation,  and  does  not  attempt  to  im- 
pose artificial  theories  on  the  budding  American  move- 
ment. 

The  Cooperative  League  of  America  publishes  an 
enormous  amount  of  literature  which  it  sends  out  freely 
over  the  whole  country.  It  has  made  it  possible  for 
societies  to  obtain  standardized  information.  It  serves 
as  a  center  to  which  appeals  may  be  made  for  help 
and  guidance.  Its  educational  work  fills  a  need  never 
before  supplied  in  this  country.  It  functionates  as  a 
central  union. 

I  come  now  to  the  recent  material  development  of 
the  cooperative  movement  in  this  country,  no  less  re- 
markable than  that  of  the  European  countries,  in  pro- 
portion, considering  the  degree  to  which  we  have  been 
affected  by  the  great  war. 

I  have  already  referred  to  the  comparatively  slight 
manifestations  of  the  cooperative  spirit  in  California 
and  the  Eastern  states,  and  the  more  material  develop- 
ment in  the  Northwest,  as  representing  the  situation 
in  this  country  before  the  war.  Properly  I  should 
also  have  mentioned  the  group  of  cooperative  socie- 
ties organized  in  southern  Illinois  by  the  coal  miners, 
the  first  of  which  were  founded  seven  or  eight  years 
ago  and  fostered  by  the  labor  unions,  largely  through 
the  personal  interest  of  John  H.  Walker,  president  of 
the  Illinois  State  Federation  of  Labor,  and  its  secre- 
tary, Duncan  McDonald. 

When  the  war  broke  out  there  were  about  two  or 
three  dozen  of  these  local  cooperative  societies  in 
southern  Illinois.  Some,  through  the  patient  persist- 
ence of  their  members,  many  of  whom  were  Britishers 
who  had  had  experience  with  cooperation  in  the  coal- 


COOPERATION    IN    THE    UNITED    STATES  1 57 

mining  regions  of  England,  where  British  cooperation 
is  strong,  had  attained  a  firm  foundation  and  were 
prospering,  saving  their  supporters  a  material  reduc- 
tion in  hving  expenses. 

Then  came  the  rise  in  the  cost  of  hving,  brought  on 
by  war  conditions,  and,  to  a  very  much  smaller  degree, 
of  course,  the  same  thing  happened  there  that  had  hap- 
pened in  England ;  all  over  Europe.  So  long  as  their 
scant  supplies  lasted,  these  little  stores  maintained  nor- 
mal prices.  That  was  not  for  long,  but  it  was  long 
enough  to  teach  the  lesson. 

Since  then  the  Illinois  store  societies  have  developed 
rapidly  and  have  spread  over  into  the  neighboring 
states.  Save  for  a  few  cases  in  which  incompetence 
was  markedly  obvious,  they  have  all  prospered.  There 
was  scarcely  one  of  them  which  was  not  returning  at 
least  an  eight  per  cent,  rebate  on  purchases  to  its  mem- 
bers before  the  United  States  entered  the  war.  Some 
developed  the  Belgian  recreational  idea,  as  in  Staunton, 
where  a  clubhouse  similar  to  Anseele's  0ns  Huis,  in 
Ghent,  is  part  of  the  local  society's  string  of  enter- 
prises. The  store  occupies  the  ground  floor  of  one  of 
the  most  imposing  buildings  in  the  town,  but  upstairs 
are  a  dance  hall,  a  movie  theater,  a  restaurant,  a  buffet, 
and  a  reading  room. 

Many  of  the  societies  in  other  towns  have  followed 
this  example,  notably  in  Danville,  where  the  local  so- 
ciety has  several  branches  of  its  main  store  in  various 
parts  of  the  town  and  where  the  social  spirit  of  the 
membership  is  almost  entirely  wrapped  up  with  the 
society.  Here,  as  in  many  of  the  other  localities,  a 
permanent  women's  committee  visits  from  house  to 
house,  to  "  carry  the  gospel  of  cooperation,"  and,  as 
this  committee  once  reported,  "  the  less  they  know 
about  it,  the  longer  we  stay."     In  Illinois,  at  least,  the 


158  consumers'  cooperation 

women  play  an  important  part  in  the  organization  and 
through  it  exercise  what  they  consider  a  power  equal 
to  political  suffrage. 

At  the  present  time  there  are  about  a  hundred  co- 
operative societies  in  this  section  of  the  country,  cen- 
tering about  Springfield,  111.  The  governor  himself 
has  become  an  enthusiastic  member  and,  in  a  public 
speech,  declared  that  it  was  his  opinion  that  cooper- 
ative history  and  principles  should  be  taught  in  the 
public  schools.  Of  these  local  organizations  about 
half  have  federated  into  the  Central  States  Cooperative 
Society,  which  has  established  headquarters  in  Spring- 
field and  opened  an  office  and  a  warehouse  in  East 
St.  Louis,  acting  as  wholesale  society  to  the  constituent 
societies. 

Of  more  recent  development  is  the  movement  in 
western  Pennsylvania,  centering  about  Pittsburgh. 
Here  again  it  is  the  miners  who  have  taken  the  initia- 
tive, but  in  this  section  they  include  many  nationalities, 
especially  Belgians  from  the  Charleroi  region,  in  Bel- 
gium, which  is  significant.  But  the  majority  are  Ital- 
ians and  Slavs.  In  one  small  town,  Bentleyville,  the 
local  cooperative,  doing  a  business  of  $200,000  a  year, 
practically  dominates  the  trade  of  the  community, 
where  local  dealers  had  been  charging  an  unusually 
high  rate  of  profit  for  years. 

These  Pennsylvania  societies  have  also  federated,  in 
the  Tri-State  Cooperative  Society,  at  the  head  of  which 
was  a  particularly  live  young  American  college  gradu- 
ate, Dalton  T.  Clarke,  who  gave  up  a  law  practice  be- 
cause of  his  interest  in  the  movement.  He  initiated 
the  federation's  enterprises  by  opening  a  warehouse  in 
Monessen,  from  which  goods  were  delivered  to  the 
local  societies  by  motor  trucks.  Eight  months  ago 
this  federation  of  consumers'  societies  had  in  its  em- 


COOPERATION    IN    THE    UNITED    STATES  1 59 

ploy  seven  men.  Since  then  another  warehouse  has 
been  opened  in  Pittsburgh,  and  now  they  have  thirty- 
five  persons  on  the  pay  roll. 

The  Tri-State  Society  has  proceeded  along  rather 
peculiar  lines,  somewhat  different  from  the  orthodox 
methods  of  the  European  wholesale  societies.  Every 
effort  has  been  made  to  bring  in  already  existing  so- 
cieties, and  a  large  majority  have  responded  by  join- 
ing. But  here  and  there,  in  communities  where  there 
were  no  cooperative  stores,  the  Tri-State  has  opened 
retail  branches  of  its  wholesale  business,  using  the 
store  as  a  nucleus  about  which  to  develop  a  society 
later  on.  The  society  now  has  about  twenty-three  such 
dependent  branches,  about  which  a  membership  has  not 
yet  developed  strong  enough  to  take  control  of  the 
branch.  Organizers  are  also  sent  into  the  unorganized 
districts  to  stimulate  the  formation  of  local  societies. 
As  an  instance,  one  of  the  Tri-State  organizers  went 
into  the  town  of  Charleroi,  Pa.,  where  there  had  been 
a  cooperative  society  some  years  before.  According 
to  Holyoake  no  cooperative  society  has  any  chance  of 
establishing  a  store  in  a  community  where  one  has  al- 
ready failed,  until  the  last  survivor  of  the  wrecked 
society  is  dead.  Fortunately  the  Tri-State  man  did 
not  know  about  this  precept,  and  in  twelve  weeks  he 
had  organized  a  society  with  nearly  300  members  and 
a  capital  of  $18,000.  This  society  is  now  running  a 
big  store  successfully  in  Charleroi,  under  the  guidance 
of  the  Tri-State, 

Farther  north  cooperation  becomes  more  rural ;  that 
is,  the  store  societies  are  largely  organized  by  farmers, 
sometimes  in  connection  with  their  marketing  associa- 
tions. It  is  in  this  prospering  region,  centering  about 
Wisconsin,  Minnesota,  and  the  two  Dakotas,  that  the 
Cooperative    Wholesale    Society    of    America     (St. 


i6o  consumers'  cooperation 

Paul),  the  American  Rochdale  Union,  the  American 
Cooperative  Association,  the  American  Rochdale 
League,  and  the  American  Cooperative  Organization 
Bureau  operate.  One  of  these  organization  bureaus 
reports  having  established  a  store  every  two  weeks  for 
the  past  six  months.  Another  started  shortly  after 
the  war  broke  out,  with  a  capital  of  $7,000.  In  1918 
it  had  seventy-five  branches  in  operation,  with  a  paid-in 
capital  of  $700,000.  It  reports  having  recently  begun 
manufacturing  on  the  Rochdale  plan.  The  broad,  so- 
cial idealism  of  the  cooperatives  backed  by  the  labor 
organizations  seems  not  so  pronounced  in  this  section, 
but  certainly  this  cannot  be  said  of  the  officials  of  the 
Cooperative  Wholesale  Society  of  America,  in  St. 
Paul,  though  I  am  personally  of  the  opinion  that  they 
are  repeating  the  mistake  of  the  Right  Relationship 
League ;  attempting  to  coordinate  two  elements  which 
are  not  compatible.  The  Nonpartisan  League  out  in 
that  section  has  in  operation  a  chain  of  some  fifty  or 
sixty  stores,  but  they  are  not  true  to  cooperative  prin- 
ciple, the  main  object  of  the  organization  being  politi- 
cal. 

Out  around  Puget  Sound  is  where  things  cooperative 
happen  overnight.  There  it  is  all  a  question  of 
months.  In  June,  1918,  the  local  society  in  Seattle  was 
organized,  under  the  leadership  of  Carl  Lunn,  a  young 
Swede  with  a  dynamic  personality,  and  it  bought  out 
a  private  store  doing  a  business  of  $4,200  a  month. 
Within  a  few  months  trade  had  developed  to  the  rate 
of  $7,000  a  month. 

Lunn  and  his  fellows  were  labor  men,  and  the  unions 
were  behind  them  —  unofficially,  of  course,  as  they 
had  been  in  Illinois.  They  were  pleased  with  this 
initial  success.  So  they,  as  labor  unions,  bought  out 
the  entire  South  End  Public  Market,  in  which  they  es- 


COOPERATION    IN    THE   UNITED   STATES  l6l 

tablished  a  general  wholesale  and  retail  meat  business. 
Part  of  the  premises  was  allotted  to  the  cooperative 
grocery  society,  while  some  of  the  stalls  were  retained 
by  the  private  dealers  who  had  previously  occupied 
them. 

During  the  next  thirty  weeks  the  combined  turn- 
over of  the  cooperative  society  and  the  labor  unions' 
meat  business  amounted  to  half  a  million  dollars.  The 
meat  business  alone  soon  rose  to  $70,000  a  month. 
Recently  the  labor  unions  holding  shares  in  the  meat 
enterprise  passed  a  resolution  in  favor  of  reorganizing 
on  a  truly  Rochdale  cooperative  basis,  with  a  view  to 
amalgamating  with  the  grocery  society,  this  to  be  ac- 
complished through  allotting,  or  selling,  the  shares  to 
the  individual  members  of  the  unions.  When  this  has 
been  done  Seattle  will  have  the  biggest  cooperative  so- 
ciety in  the  United  States,  for  the  individual  members 
of  the  unions  concerned  number  many  thousands. 

In  another  part  of  Seattle  the  plumbers  and  steam- 
fitters'  union  bought  out  a  grocery  store  and  soon  were 
doing  a  big  business,  amounting  to  as  much  as  $1,200 
a  day  during  the  big  strike.  Here,  too,  a  resolution 
was  passed  in  favor  of  reorganization  on  the  Rochdale 
basis. 

The  Puget  Sound  region  is  dotted  with  cooperatives, 
each  possessed  of  the  virile  energy  characteristic  of  the 
Seattle  Cooperators.  A  federation  has  been  formed 
in  the  Northwestern  Cooperative  Association,  which 
has  behind  it  the  drive  of  all  the  labor  elements  of  the 
state.  "  The  Big  Idea,"  they  call  it,  and  as  such  it  is 
known  to  all,  without  further  description. 

Some  mention  should  be  made  of  another  coopera- 
tive enterprise  established  by  the  Seattle  labor  men, 
which  has  potential  possibilities  in  it  for  the  future  of 
the  movement.     That  is  a  loan  association,  the  shares 


i62  consumers'  cooperation 

of  which  have  been  sold  exclusively  to  labor  unions  and 
cooperative  societies.  If  this  develops  along  lines  simi- 
lar to  the  Narodni  Bank  of  Moscow,  cooperation  will 
indeed  receive  a  powerful  stimulus  along  the  entire 
Pacific  slope,  for  that  will  mean  vast  funds  for  the 
development  of  cooperative  enterprises.  The  savings 
of  the  working  classes  will  be  diverted  from  the  ordi- 
nary channels  of  capitalistic  trade  into  the  cooperative 
movement. 

Most  of  the  cooperative  activity  is,  undoubtedly,  in 
the  West  and  the  Middle  West.  At  least  it  is  in  those 
sections  that  the  members  get  together  and  federate, 
showing  enthusiasm  for  the  movement  not  only  be- 
cause of  the  saving  it  offers  in  the  cost  of  living,  but 
for  the  social  idea  it  embodies.  Nevertheless,  there 
are  some  examples  of  successful  cooperation  farther 
east.  A  notable  instance  is  that  of  the  Into  Cooper- 
ative Society,  in  Fitchburg,  Mass. 

In  1 910  this  society  opened  a  grocery  store,  which 
did  a  business  of  $20,000  that  year.  Now  the  society 
operates  four  grocery  stores,  a  men's  furnishing  and 
shoe  store,  and  a  bakery,  all  of  whose  sales  combined 
amounted  to  half  a  million  dollars  during  19 18.  The 
society  also  operates  a  bank,  which  has  assisted  many 
struggling  cooperatives  with  loans,  notably  a  cooper- 
ative housing  society  in  Brooklyn,  N.  Y.  Recently 
the  society  took  over  a  milk-distributing  route  and  is 
now  serving  a  thousand  families  a  day. 

In  Paterson,  N.  J.,  a  cooperative  bakery  was  or- 
ganized some  years  ago  by  the  Jewish  immigrants,  who 
found  difficulty  in  getting  the  particular  kind  of  bread 
that  suited  their  taste.  But  at  that  time  the  Purity 
Bakery,  as  the  enterprise  was  called,  was  not  run  on 
strictly  Rochdale  principles.  Instead  of  charging  mar- 
ket prices  and  returning  the  profits  to  the  purchasing 


COOPERATION    IN    THE    UNITED    STATES  163 

members,  the  society  put  the  price  of  its  bread  at  a 
Httle  above  cost  and,  if  a  surplus  remained,  that  was 
devoted  to  some  public  charity,  or  to  strike  funds. 

Along  came  the  war  and  the  high  cost  of  living,  and 
finally  the  fixing  of  the  price  of  bread  by  the  Federal 
Food  Control  Board.  Bakers  from  all  over  the  coun- 
try, it  will  be  remembered,  protested  against  the  prices 
fixed  by  the  government ;  they  would  be  ruined,  many 
of  them  said,  if  they  were  compelled  to  sell  their  bread 
at  so  low  a  price.  At  about  the  same  time  that  their 
telegrams  were  pouring  into  Mr.  Hoover's  office  in 
Washington,  the  Purity  Cooperative  Bakery  tele- 
graphed, but  to  this  effect:  if  it  must  sell  bread  at  the 
government  price,  the  management  would  have  ac- 
cumulating on  its  hands  a  surplus  fund  which  it  would 
not  know  how  to  dispose  of ;  it  would  be  disobeying  the 
by-laws  of  the  society.  In  other  words,  the  board  of 
management  complained  of  the  prices  set  by  the  gov- 
ernment being  too  high. 

Naturally,  no  exception  could  be  made  in  favor  of 
one  establishment,  and  so  the  Purity  Bakery  was  left 
to  solve  the  difficulty  of  having  too  much  money  as 
best  it  could.  Washington  was  not  disposed  to  sym- 
pathize. 

Then  the  management  committee  called  a  general 
meeting  of  the  members  and  put  the  situation  before 
them.  The  result  was  that  a  Rochdale  constitution 
was  adopted,  the  surplus  was  distributed  among  the 
members  in  proportion  to  their  purchases  and,  hearing 
of  this,  so  many  new  members  enrolled  that  the  Purity 
Bakery  became  one  of  the  biggest  baking  establish- 
ments in  Paterson.  Since  then  two  similar  cooper- 
ative bakeries  have  been  established  in  emulation  of  the 
success  of  the  Purity  in  near-by  communities;  one  in 
Newark,  N.  J.,  the  other  in  Brownsville,  a  district  of 


164  consumers'  cooperation 

Brooklyn,  N.  Y.,  both  of  which  bid  fair  soon  to  attain 
a  size  equal  to  the  Paterson  enterprise. 

The  universal  appeal  of  cooperation  is  illustrated  in 
a  very  picturesque  phase  of  the  movement  w^hich  has 
taken  root  down  in  Tampa,  Fla.,  and  neighboring 
towns.  In  1914,  after  a  prolonged  strike  of  the  work- 
ers in  the  cigar  factories  of  that  section,  Gregorio 
Chavez,  one  of  these  Spanish  speaking,  or  Latin,  work- 
ers, as  they  call  themselves,  began  agitating  for  com- 
munity stores.  He  knew  nothing  of  Rochdale  princi- 
ples, but  he  had  conceived  of  the  general  idea.  His 
efforts  caused  some  dozens  of  the  cigar  workers  to  get 
together  and  start  a  small-store  society,  on  the  same 
scale  and  in  the  same  way  as  the  weavers  of  Rochdale 
had  initiated  their  famous  undertaking.  A  store  was 
not  even  rented ;  the  goods  were  bought  and  distributed 
of  evenings  in  the  private  house  of  one  of  the  group. 
The  initial  capital  subscribed  was  fifty  dollars,  while 
the  society  gave  itself  the  optimistic  name  of  El  Pro- 
gresso. 

In  the  beginning  of  19 17  there  were  seven  of  these 
small  groups  in  West  Tampa  and  Ybor  City,  with  a 
membership  of  450.  By  February,  1919,  there  were 
21  societies,  with  a  membership  of  about  1,500,  and 
about  half  of  them  were  established  in  regular  stores. 

But  by  this  time  they  began  attracting  the  attention 
of  the  local  retailers,  who  were  beginning  to  suffer 
from  this  diversion  of  retail  trade,  amounting  now  to 
close  on  $70,000  a  month.  Under  the  leadership  of 
the  local  representative  of  the  Federal  Food  Control 
Board,  one  Jones,  the  retailers  organized  and  began 
initiating  a  boycott  of  the  cooperatives;  they  notified 
the  wholesalers  that  they,  the  wholesalers,  must  refuse 
to  sell  to  the  cooperatives  if  they  would  continue  to 
sell  to  the  retail  trade  of  the  region.     All  but  one,  a 


COOPERATION    IN    THE    UNITED   STATES  165 

Latin  wholesaler,  Guerra,  complied.  Guerra,  true  to 
his  name,  refused  to  be  dictated  to,  and  proceeded  to 
fight  the  ring  with  the  government  official  at  its  head. 

The  cooperatives,  by  this  time  loosely  federated  in 
a  General  Assembly  of  Cooperative  Delegates,  also 
took  action  and  hired  a  lawyer.  The  latter,  who  for- 
tunately happened  to  be  an  honest  man,  suggested  that 
the  Cooperators  save  themselves  the  expense  of  litiga- 
tion by  an  appeal  to  public  opinion,  through  the  board 
of  governors  of  the  local  chamber  of  commerce.  This 
was  done,  and  the  case  was  brought  before  that  body. 
It  then  developed  that  the  president  of  the  board  was 
one  of  the  very  wholesalers  who  were  boycotting  the 
cooperatives.  The  members  of  the  board  were  com- 
pletely puzzled ;  they  had  never  met  such  a  case  before. 
Naturally,  they  could  enforce  no  decision,  but  the  gen- 
eral feeling  of  the  members  of  this  body,  representing 
private  business  though  it  did,  seemed  to  be  that  the 
wholesalers  were  acting  unfairly.  The  local  press  took 
the  matter  up,  and  finally  the  wholesalers  agreed  to 
resume  trade  relations  with  the  cooperatives. 

But  now  Guerra,  the  wholesaler  who  had  been  dis- 
loyal to  his  trade  associates,  was  made  to  feel  the  brunt 
of  their  displeasure.  He  had  been  appealing  and  writ- 
ing complaints  to  Washington  and  saying  unpleasant 
things  about  his  associates  to  local  newspaper  reporters. 
They  began  to  boycott  him ;  the  jobbers  refused  him 
goods  and  the  banks  refused  him  credit.  In  retaliation 
he  began  court  proceedings  against  the  leader  of  the 
retailers,  the  food  controller,  and  the  cooperatives 
backed  him  up  strongly.  In  a  legal  court,  however, 
the  cause  of  cooperation  and  the  fighting  merchant 
lost  out. 

In  their  efforts  to  get  assistance  the  Latin  Cooper- 
ators, through  their  secretary,  A.  R.  Hernandez,  got 


1 66  consumers'  cooperation 

in  touch  with  the  rest  of  the  national  movement  of  the 
country,  more  particularly  with  the  Cooperative 
League  of  America,  and  began  to  discover  that  they 
were  not  wholly  based  on  correct  principles.  Now 
they  are  reorganizing  and  preparing  to  establish  a 
wholesale.  Great  quantities  of  the  Cooperative 
League's  literature  have  been  translated  and  published 
in  Spanish  and  spread  broadcast  throughout  the  re- 
gion. Meanwhile  the  local  societies  now  number  28 
and  the  membership  has  swelled  to  1,700;  which  has 
always  been  the  result  of  attempts  to  suppress  co- 
operative enterprises.  The  American  elements  in 
Tampa  are  also  aroused  and,  backed  by  the  labor 
unions,  an  American  organization  has  been  formed, 
which  publishes  a  fortnightly  paper,  The  Cooperative 
World,  half  of  which  is  in  Spanish. 

In  actual  figures  it  is  difficult  to  sum  up  the  co- 
operative movement  in  the  United  States.  Years  ago 
the  Department  of  Commerce  and  Labor  in  Washing- 
ton included  cooperative  enterprise  in  its  statistics,  but 
it  has  nothing  now  to  indicate  the  scope  of  the  present 
movement.  Two  years  ago,  shortly  after  it  was 
founded,  the  Cooperative  League  of  America,  after  a 
thorough  canvass  of  the  country,  had  five  hundred  so- 
cieties listed,  many  of  which  were  later  eliminated  be- 
cause it  was  discovered  that  they  had  ceased  to  exist. 

Then  came  the  indorsement  of  cooperation  by  the 
American  Federation  of  Labor  Convention,  in  191 7, 
under  the  influence  of  the  Illinois  delegates.  This  un- 
doubtedly proved  suggestive  to  many  labor  groups 
throughout  the  country.  A  year  later,  in  the  fall  of 
1918,  the  first  national  convention  of  American  Co- 
operative Societies  was  held  in  Springfield,  111.,  and 
the  success  of  this  conference  from  the  point  of  view 
of  numbers  alone  proved  a  further  stimulus.     At  the 


COOPERATION    IN   THE   UNITED   STATES  167 

convention  was  organized  the  National  Cooperative 
Association,  with  DaUon  T.  Clarke,  of  the  Tri-State 
Society,  as  president.  With  tremendous  vigor,  backed 
by  the  funds  of  the  Tri-State,  the  National  Association 
has  set  about  organizing  new  societies  from  its  head- 
quarters in  Chicago.  It  has  brought  together  the 
wholesale  societies  of  California,  Seattle,  St.  Paul 
and  Springfield,  and  welded  them  together  into  a  na- 
tional unit  of  the  international  movement,  laying  the 
foundation  of  a  national  wholesale  society.  Encour- 
aged by  the  economic  advantages  offered  by  the  Na- 
tional ^Association,  which  is  even  now  opening  branches 
in  New  York  City  and  Boston,  new  societies  are  easily 
stimulated  into  activity. 

The  Cooperative  League  and  the  National  Associa- 
tion, the  one  representing  propaganda,  the  other  the 
commercial  aspect  of  the  movement,  now  have  listed 
over  3,000  American  cooperative  societies,  all  of  which 
are  undoubtedly  in  existence  at  the  present  moment. 
The  2,000  societies  listed  by  the  League  practically  all 
wrote  in  on  their  own  initiative,  showing  that  they 
were  interested  in  the  educational  aspect  of  the  co- 
operative movement. 

What  the  destiny  of  the  American  cooperative  move- 
ment may  be  is  open  to  discussion.  Compared  to  such 
countries  as  Great  Britain,  Switzerland,  Germany,  Rus- 
sia, and  a  dozen  other  European  states,  we  have  com- 
paratively nothing  to  show,  though  it  must  be  remem- 
bered that  before  the  war  Russia  had  even  less  than  we 
have  now.  But  whatever  its  future  development,  co- 
operation is  in  America  to  stay.  For  already  it  has 
passed  the  most  difficult,  the  most  trying,  stage:  the 
formation  and  establishment  of  the  local  societies. 
While  these,  when  well  managed,  undoubtedly  do 
benefit  their  members,  it  is  only  when  they  federate  and 


1 68  consumers'  cooperation 

pool  their  interests  that  the  benefits  become  consider- 
able, in  a  material  sense.  It  is  exactly  that  which  the 
American  societies  have  been  doing  within  the  past 
two  years. 


PART  II 

COOPERATION  AS  A  FACTOR  IN  THE 
SOCIAL  REVOLUTION 


CHAPTER  I 

LIMITING    THE    FIELD    TO    REVOLUTIONARY 
COOPERATION 

In  the  foregoing  chapters  I  have  outlined  the  gradual 
development  of  Consumers'  Cooperation,  from  its 
nebulous  beginnings  a  hundred  years  ago  to  its  present 
status  as  a  world-wide  organization  of  over  fifty  mil- 
lion souls.  I  have  attempted  to  place  before  the  reader 
a  simple  record  of  what  cooperation  has  so  far 
achieved. 

Considering  only  the  present  dimensions  of  the  co- 
operative movement,  together  with  its  normal  rate  of 
expansion,  before  the  war,  it  must  be  obvious  that  what 
it  has  so  far  achieved  is  only  a  part,  and  perhaps  only 
a  very  small  part,  of  what  it  has  yet  to  achieve.  At 
the  present  moment  there  is  nothing  in  sight  which 
seriously  threatens  its  further  progress  in  the  immedi- 
ate future.  Even  those  who  may  regard  it  with  preju- 
diced eyes  cannot  deny  that  it  is  destined  to  be  a  big 
factor  in  the  industrial  and  social  reconstruction  which 
must  follow  the  war. 

Utilizing  the  material  before  us  as  a  basis,  it  cannot 
be  altogether  unprofitable  to  make  a  few  constructive 
deductions  regarding  the  influence  that  the  cooperative 
movement  will  exercise  in  the  future  development  of 
civilized  human  society.  Certainly  there  is  more  than 
abstract  interest  in  asking:  how  widely  is  this  revo- 
lutionary system  likely  to  expand  ?  What  other  social 
forces  are  there  tending  to  check  its  progress?  Is  it 
an  ally,  or  is  it  an  enemy,  of  such  tempestuous  forces 

171 


172  CONStTMERS     COOPERATION 

as  are  now  sweeping  over  Russia  and  seem  even  to 
threaten  other  countries?  Finally,  assuming  that  it 
does  eventually  permeate  all,  or  the  greater  part,  of 
civilized  society,  how  will  it  modify  our  present  condi- 
tions of  life? 

I  have  before  remarked,  and  I  must  again  emphasize, 
that  most  of  the  literature  dealing  with  cooperation 
has  led  to  confusion  in  determining  the  true  character 
of  the  movement.  Perhaps  it  may  be  presumptuous 
to  set  oneself  up  against  the  recognized  authorities  and 
exponents  of  the  subject,  but  it  is  not  necessarily  su- 
perior wisdom  which  may  lead  one  to  disagree  with 
previous  opinions.  Supplementary  evidence  may 
cause  a  revision  of  conclusions  which  were  logical 
enough,  considering  the  limited  data  on  which  they 
were  based.  I  maintain  that  these  supplementary  data 
are  at  hand  in  the  record  of  the  more  recent  develop- 
ment of  Consumers'  Cooperation. 

I  have  already  limited  the  field  under  consideration 
to  what  many  authorities  still  consider  only  one  phase 
of  the  subject:  Consumers'  Cooperation.  In  present- 
ing my  reasons  for  doing  so  in  more  detail,  I  believe 
I  shall  also  be  helping  in  a  clearer  understanding  of  the 
essential  characteristics  of  Consumers'  Cooperation 
itself. 

As  a  rule  cooperation,  considered  broadly,  has  been 
divided  into  four  chief  phases:  Productive,  Agricul- 
tural, Credit,  and  Distributive.  It  has  generally  been 
assumed  that  all  these  different  forms  of  joint  effort 
acted  on  some  common  principle,  that  their  interests 
were  mutual  and  that  their  ultimate  purposes  were 
identical.  To  this  day,  it  must  be  remembered,  repre- 
sentative societies  of  any  of  these  groups  are  freely 
admitted  into  the  International  Cooperative  Alliance. 
In  those  countries  where  cooperation  is  of  compara- 


LIMITING   THE    FIELD  1/3 

tively  recent  origin,  as  in  Finland  and  Ireland,  the  na- 
tional unions  still  include  all  these   forms. 

This  first  assumption  of  a  common  interest  between 
these  various  forms  of  joint  effort  had  some  justifica- 
tion in  a  time  when  inherent  characteristics  had  not 
yet  manifested  themselves.  All  presented  the  attrac- 
tive feature  of  joint  effort  among  men  in  humble  life. 
All  made  their  appeals  in  the  name  of  economic  justice 
for  the  toiling  masses.  On  this  sentimental  basis  there 
was  a  tendency  toward  coming  together. 

Then,  at  different  periods  in  the  various  countries, 
according  to  the  degree  of  cooperative  development 
which  had  been  achieved,  a  silent  disintegration  began 
to  take  place.  There  was  no  open  quarreling,  but  as 
the  local  organizations  acquired  size  and  strength,  they 
seemed  instinctively  to  realize  that  all  were  not  birds  of 
a  feather,  and  a  separate  grouping  of  each  form  took 
place,  each  society  seeking  its  kind.  Not  only  was 
there  no  ill  feeling  behind  this  quiet  process  of  re- 
arrangement, but  mutual  regret  was  the  predominating 
sentiment.  Some  subtle  economic  law  had  been 
brought  into  operation. 

Dr.  Hans  Miiller,  that  critical  student  of  cooper- 
ation, from  whom  I  have  already  quoted  so  copiously, 
was  one  of  the  first  to  recognize  this  tendency  as  in- 
evitable and  to  ascribe  it  to  a  divergence  of  interests 
and  fundamental  principles.  Says  he,  in  his  article  on 
the  International  Cooperative  Alliance,  in  the  First 
Yearbook  of  that  body  (1910)  : 

"  In  a  formal  way  one  may  regard  the  cooperative 
efforts  of  the  various  avocations  and  classes  of  society, 
and  the  organization  which  they  create,  as  forming  a 
united  body  and  as  branches  springing  from  a  single 
stock.  But  their  relations  to  each  other  are  only 
seeming  and  external.     If  we  penetrate  into  the  inner 


174  CONSUMERS     COOPERATION 

kernel  of  the  different  societies  that  lie  within  the  same 
legal  shell,  we  find  there  not  only  economic  principles 
and  social  aims  and  tendencies  which  differ  widely,  but 
are  even  opposed  to  each  other  —  and  logically  viewed 
must  exclude  each  other  and  come  in  conflict  in  the 
conduct  of  real  life.  Codperation  has  ceased  to  be  a 
movement  which  embraces  a  common  social  ideal  and 
an  identical  interest. 

"  As  a  matter  of  fact,  no  country  has  been  able  to 
form  a  general  federation  which  includes  and  furthers 
all  branches  and  forms  of  cooperation.  The  so-called 
general  unions  of  Germany,  Austria,  and  elsewhere 
long  ago  ceased  to  be  entitled  to  their  name.  They 
are,  looked  at  clearly,  just  as  much  specialized  unions 
as  those  whose  titles  declare  them  to  be  such  (central 
union  of  distributive  societies,  of  industrial  societies, 
of  agricultural  societies,  and  so  on).  The  unity  of 
the  cooperative  movement,  which  its  theorists  and  first 
promoters  fifty  years  ago  tried  to  bring  into  promi- 
nence by  the  establishment  of  general  unions,  has  long 
since  suffered  shipwreck  from  the  actual  development 
of  the  cooperative  movement." 

Unfortunately  Dr.  Miiller  does  not  give  the  basis 
for  these  deductions.  He  points  out  an  effect,  but 
only  generalizes  as  to  the  causes. 

Wherein,  then,  lies  this  difference  between  the  inter- 
ests of  men  who  proclaim  the  same  ideals? 

The  controversy  attending  the  split  between  the  con- 
sumers' cooperative  societies  and  the  representatives 
of  one  of  these  four  groups,  the  Productive,  or  self- 
governing,  workshops,  has  already  been  accorded  suf- 
ficient detail  in  my  narrative.  The  issue  is  now  dead, 
lor  as  a  movement  the  self-governing  workshops  have 
ceased  to  exist,  except  that  there  is  a  strong  similarity 
between  the  theories  on  which  their  advocates  based 


LIMITING   THE    FIELD  175 

them  and  those  underlying  the  program  of  the  modem 
Syndicalists.  That  we  shall  consider  later.  For  a 
comprehensive  analysis  of  the  Christian  Socialist 
theories  I  will  refer  the  reader  to  Mrs.  Sidney  Webb's 
(or  Beatrice  Potter's)  work,  "  The  Cooperative  Move- 
ment in  Great  Britain,"  wherein,  as  far  back  as  1891, 
when  the  controversy  was  at  its  height,  she  fully  justi- 
fied the  consumers'  societies  in  their  rejection  of  the 
Christian  Socialist  doctrines,  none  the  less  convincingly 
because  she  was  herself  an  outsider,  holding  views  op- 
posed to  both  sides.  This  book  I  urgently  recommend 
to  those  Americans  who  still  associate  cooperation  with 
the  defunct  cooperage  shops  of  Minneapolis  and  St. 
Paul  and  believe  that  American  cooperation  died  with 
them. 

Agricultural  cooperation,  however,  stands  before  us 
in  a  very  different  position.  It  is  to-day  a  live,  virile 
institution  and  in  this  country  is  making  gigantic 
strides  forward.  Here,  save  for  the  possible  excep- 
tion of  Brazil,  it  has  reached  its  highest  degree  of  per- 
fection, in  the  fruit  growers'  associations  of  Califor- 
nia and  the  wheat  growers'  combines  of  the  Northwest 
and  Canada.  Perhaps  one  of  the  best  examples  of 
this  form  of  American  cooperation  may  be  found  in 
the  recently  organized  Dairymen's  League  of  New 
York  State,  and  to  which  I  shall  refer  again  later. 
Agricultural  cooperation,  however,  has  also  experi- 
enced marked  development  in  some  of  the  European 
countries,  notably  in  Russia  and  Ireland  and  Den- 
mark, though  in  some  countries,  as  in  England,  Scot- 
land, and  Belgium,  it  has  so  far  shown  little  indication 
of  progress. 

For  the  purpose  of  comparison  let  us  sum  up  the 
essential  characteristics  of  each  of  these  two  types  of 
joint  effort. 


176  consumers'  cooperation 

First  of  all,  the  immediate  purpose  of  Consumers* 
Cooperation  is  the  production  and  supply  of  goods  for 
the  use  of  its  own  members  primarily.  To  accom- 
plish this  end  the  necessary  machinery  must  be  ac- 
quired and  set  in  motion:  stores,  factories,  land,  etc. 
All  this  property,  acquired  gradually,  as  it  is  needed 
to  supply  the  increasing  membership,  is  owned  col- 
lectively by  the  members,  each  having  an  equal 
share.  Social  partnership  takes  the  place  of  private 
ownership;  social  profit  takes  the  place  of  private 
profit. 

Again,  in  the  management  of  all  the  operations  of 
the  property,  each  member  shares  equally.  Each  has 
a  voice  in  the  control.  Finally,  membership  is  open 
to  all  comers,  regardless  of  sex,  creed,  race,  or  avoca- 
tion. The  basis  of  the  membership  is  a  human  being, 
pure  and  simple.  Potentially  membership  includes  all 
society  —  it  is  all-inclusive.  Consumers'  Cooperation 
is  essentially  a  social  movement,  for  the  interests  it 
represents  permeate  all  society. 

An  agricultural  cooperative  society  consists  of  a 
number  of  farmers  who  combine  in  selling  their  prod- 
uce. Their  purpose  is  to  increase  the  financial  returns 
from  those  sales,  first,  by  reducing  the  charges  of  the 
middlemen.  By  pooling  their  sales  they  create  a  vol- 
ume of  business  big  enough  to  justify  special  agencies 
of  sale,  over  which  they  have  full  economic  control. 
Secondly,  where  conditions  permit,  they  endeavor  to 
maintain  a  high  level  of  prices  for  their  goods  by  regu- 
lating the  volume  of  their  sales,  through  holding  up 
shipments  and  storing  their  goods  when  there  is  a 
downward  tendency  in  the  market.  In  some  cases,  as 
with  the  Dairymen's  League  of  New  York,  they  may 
even  hold  up  the  supply  entirely  until  their  demands  are 
complied  with.     Thus  it  will  be  seen  that  a  farmers' 


LIMITING   THE   FIELD  177 

association  is  more  truly  deserving  of  the  name  "  dis- 
tributive "  than  a  consumers'  society. 

For,  as  a  matter  of  fact,  cooperative  action  does  not 
begin  until  the  productive  stage  has  been  entirely 
passed.  Going  back  to  the  beginning,  the  farmer,  as 
a  private  individual  and  on  his  own  personal  initiative, 
invests  his  private  capital  in  a  certain  amount  of  land, 
buys  his  own  machinery  and  produces,  sometimes  en- 
tirely with  hired  labor,  certain  commodities  destined 
to  be  sold  on  the  ordinary  speculative  market.  The 
land,  the  labor-saving  machinery,  and  the  produce,  all 
are  his  private  property.  The  unit  of  membership  of 
a  farmers'  association  is  not  a  person,  but  a  private 
business  interest.  Is  that  not  borne  out  by  the  fact 
that  the  qualification  for  membership  is  the  ownership 
of  a  productive  plant  representing  a  certain  amount 
of  invested  capital  ? 

And  while  agricultural  associations  do  sometimes 
eliminate  the  commissions  of  the  middlemen  by  placing 
them  on  a  salary  basis,  they  do  not  eliminate  private 
profit,  for  the  goods  are  sold  at  as  big  a  margin  above 
the  cost  of  production  as  possible,  and  this  margin 
goes  into  the  pocket  of  the  original  seller,  the  farmer. 
True,  this  margin  is  very  often  not  more  than  a  just 
return  for  the  labor  involved  in  the  production  of  the 
goods,  but  the  margin  is  not  regulated  on  that  basis. 
It  is  a  purely  speculative  margin.  Even  personal  su- 
pervision of  the  production  of  the  goods  marketed  is 
not  a  required  qualification  for  membership.  Not  a 
few  of  the  members  of  the  California  fruit  growers' 
associations  are  mere  business  men,  possessed  of  no 
technical  knowledge  whatever,  who  have  invested  capi- 
tal in  some  hundreds  or  thousands  of  acres  of  fruit 
land,  have  placed  a  superintendent  in  charge,  and  enjoy 
substantial  revenues  from  estates  which  they  visit  only 


178  consumers'  cooperation 

once  or  twice  a  year.  Whether  such  cases  are  typical 
or  not  is  entirely  irrelevant.  Others,  again,  through 
the  economic  strength  given  them  by  the  association, 
are  able  to  hold  their  produce  for  a  rise  in  the  market 
and  thus,  by  pure  speculation,  gain  handsome  profits 
w^hich  certainly  have  no  relation  to  the  amount  of  labor 
expended.  A  cooperative  grain  elevator  is  nothing 
more  nor  less  than  the  machinery  for  joint  speculation. 

Wherein  does  an  agricultural  cooperative  association 
differ  from  those  combinations  of  small  manufacturers 
who  attempt  to  raise  profits  by  joint  advertising  and 
marketing  and  by  controlling  supply,  until  sometimes  a 
trust  is  created  ?  Wherein  is  the  social  character  of  an 
organization  whose  membership  is  strictly  limited  to 
men  of  one  line  of  business? 

Nor  need  one  seek  far  to  discover  concrete  illustra- 
tions of  this  fundamental  diversity  of  interests  be- 
tween the  organized  farmers  and  the  organized  con- 
sumers. Within  the  past  two  years  the  New  York 
dairymen  have,  through  their  combination,  raised  the 
price  of  milk  to  the  ultimate  consumer  from  nine  to 
fifteen  cents  a  quart.  I  do  not  deny  that  previous  to 
their  organization  the  dairymen  may  have  been  receiv- 
ing too  low  a  price  for  their  milk  to  pay  for  actual 
labor.  But  the  same  power  which  they  employed  in 
raising  their  remuneration  to  a  level  in  accordance  with 
justice  could  also  be  employed  in  raising  it  still  higher. 

Another  notable  illustration  of  the  conflicting  in- 
terests between  the  two  forms  of  organization  under 
consideration  is  the  coffee  growers*  associations  of 
Brazil.  The  Brazilian  coffee  planters  first  organized 
along  the  usual  lines,  then  entered  into  a  contract  with 
the  Brazilian  Government  whereby  the  latter  built  them 
warehouses  in  which  they  could  store  their  coffee.  So 
that  the  planter  should  not  lose  the  interest  on  his  idle 


LIMITING   THE    FIELD  I79 

capital,  the  government  advanced  him  money  on  it. 
Through  this  system  of  storage,  "  valorization 
scheme,"  as  it  was  called,  shipments  could  be  so  regu- 
lated that  a  steady  level  of  high  prices  could  be  main- 
tained in  the  coffee  markets  of  the  whole  world,  the 
result  being  that  among  some  millions  of  poor  work- 
ingmen's  families  throughout  Europe  coffee  became  an 
almost  unattainable  luxury. 

Again,  we  have  the  instance  of  the  wheat  growers' 
association  of  western  Canada  who,  at  the  beginning  of 
the  war,  sent  their  representative  to  bargain  with  an 
agent  of  the  British  Government  for  a  "  just  price  " 
for  wheat  to  the  British  public  and  the  British  armies 
in  France.  The  British  Government's  representative 
was  horrified  by  the  demands  of  the  farmers'  repre- 
sentative. 

"  Have  you  no  patriotism  ?  "  he  demanded  hotly. 

"  I  am  not  a  Britisher  myself,"  replied  the  farmers* 
agent.  "  I  am  a  citizen  of  the  United  States."  This 
was  before  the  United  States  had  entered  the  war. 
The  Canadian  farmers  obtained  their  price. 

In  the  same  way  the  buyers  of  the  British  cooper- 
ative wholesale  societies  were  also  held  up  for  high 
prices.  They  quietly  bowed  their  heads  before  a  supe- 
rior power,  but  some  months  later  it  was  announced 
that  the  English  and  Scottish  wholesale  societies  had 
purchased  ten  thousand  acres  of  wheat  lands  in  Canada. 

But  already  before  the  war  a  realization  of  the  situ- 
ation had  been  creeping  in  among  the  consumers'  so- 
cieties, not  only  of  Great  Britain,  but  of  the  Continen- 
tal countries  as  well.  To  be  sure,  there  are  still  ideal- 
ists in  the  movement  who  are  deceived  by  outward 
appearances  and  call  for  "  unity."  Such  an  appeal 
was  made  not  longer  ago  than  in  1913,  at  the  last 
international  cooperative  congress,  held  in  Glasgow. 


i8o  consumers'  cooperation 

In  speaking  on  the  question  thus  raised,  a  Swiss  dele- 
gate, Herr  Angst,  said  of  the  situation  in  Switzerland: 

"  All  our  agricultural  societies  have  banded  them- 
selves together  into  powerful  peasant  organizations 
and  have  acquired  such  strength  that  they  control  the 
highest  authorities  in  our  country,  and  if  we  were  to 
express  the  wish  that  they  should  join  our  Interna- 
tional Cooperative  Alliance  we  should  at  the  best  call 
forth  a  sympathetic  smile  at  what  would  be  regarded  as 
weakness  on  our  part  and  our  suggestion  would  be 
sternly  rejected.  In  my  opinion  the  inclusion  of  the 
Swiss  peasants'  cooperative  societies  would  weaken  and 
maim  the  activity  of  our  Alliance.  The  interests  of 
the  Swiss  agricultural  societies  are  diametrically  op- 
posed to  our  interests.  I  do  not  understand  what  in- 
terests the  Alliance  could  have  in  common  with  the 
agricultural  societies.  The  Peasants'  Union  in  Switz- 
erland is  the  bitterest  enemy  of  our  cooperative  move- 
ment, and  seeks  to  hinder  our  development  in  every 
possible  way.  This  union  fears  that  the  consumers* 
societies  will  unfavorably  influence  the  prices  it  has 
fixed,  and,  therefore,  it  seeks  to  suppress  the  formation 
of  cooperative  distributive  societies.  The  Peasants' 
Union  prefers  to  trade  with  private  customers,  for  it 
is  firmly  convinced  that  the  unorganized  consumers  can 
do  less  than  the  organized  in  opposition  to  its  inter- 
ests. If  the  peasants'  organization  makes  any  profits 
it  divides  them  according  to  the  number  of  shares  held 
by  each  member.  .  .  ." 

Mr.  Angst's  words,  of  course,  represent  a  situation 
which  is  only  reached  where  both  forms  of  organiza- 
tion have  attained  large  dimensions,  as  is  the  case  in 
Switzerland.  Each  side  has  acquired  a  large  amount 
of  economic  power  in  the  exercise  of  which  it  has 


LIMITING   THE   FIELD  l8l 

come  to  realize,  from  actual  experience,  that  there  is 
a  clash  of  interests.  In  a  country  like  Russia  where, 
though  size  has  been  attained,  both  movements  are  still 
young  and  have  had  little  practical  experience,  no  such 
realization  has  been  reached  and  joint  federation  is 
still  maintained.  Yet  it  is  significant  that  there  is  at 
present  a  bitter  division  among  the  members  of  the 
committee  to  America ;  between  those  representing  ag- 
ricultural societies  and  those  representing  consumers' 
societies,  over  the  question  whether  the  Koltchak  gov- 
ernment should  be  recognized.  It  is  characteristic  that 
the  agricultural  societies  should  be  in  favor  of  Kolt- 
chak's  reactionary  tendencies.  The  same  is  true  in 
Ireland,  where  the  agricultural  organizations,  in  the 
form  of  a  joint  wholesale,  have  full  control  of  the  re- 
cently developed  consumers'  movement  and  are  able 
to  fix  the  prices  at  which  their  produce  shall  pass  into 
the  hands  of  the  consumers. 

Again  and  again  the  point  is  raised  that  the  agri- 
cultural producers  and  the  consumers  are  dependent 
on  each  other.  But  we  are  not  discussing  agricultural 
production  —  as  such.  I  have  been  considering  only 
the  system  by  which  it  is  carried  on  and  how  this  sys- 
tem creates  a  special  interest  for  those  now  directing 
the  agricultural  industries;  the  interest  of  private 
profit.  The  farmer  as  a  worker  we  shall  consider 
later. 

While  all  forms  of  enterprise  based  on  private  profit 
are  no  doubt  dependent  on  the  consumers  of  their 
products,  the  consumers  are  by  no  means  dependent  on 
them.  Or,  at  least,  the  road  to  independence  lies  open 
before  them.  At  one  time  the  consumers'  societies 
were  dependent  on  the  wholesale  merchants.  The 
wholesale  societies  have  released  them  from  this  eco- 


i82  consumers'  cooperation 

nomic  bondage  completely,  and  they  are  not  very  far 
from  having  freed  them  from  the  private  manufac- 
turers as  well,  in  Great  Britain,  at  least. 

When  the  British  wholesale  societies  purchased  their 
tea  estates  in  Ceylon,  they  thereby  acquired  a  certain 
degree  of  liberation  from  the  tea  planters'  associations. 
At  any  rate,  the  latter  dare  no  longer  apply  pressure, 
for  the  immediate  result  would  be  the  acquisition  of 
more  tea  land  on  the  part  of  the  cooperative  organiza- 
tions. When  the  wheat  growers  of  Canada  showed 
themselves  disposed  to  take  advantage  of  the  cooper- 
ative organizations  by  exercising  their  joint  economic 
power  over  them,  the  cooperative  organizations  were 
not  long  in  showing  that  they  had  in  their  hands  an 
economic  power  vastly  greater.  Those  ten  thousand 
acres  of  wheat  land  will  supply  only  an  infinitesimal 
part  of  the  wheat  needed  by  the  cooperative  flour  mills 
in  England  and  Scotland.  But  that  land  constitutes 
an  entering  wedge;  it  is  nothing  less  than  the  point  of 
the  knife  held  against  the  breast  of  the  capitalist  pro- 
ducer of  wheat.  Against  this  threat  he  stands  abso- 
lutely helpless.  Those  ten  thousand  acres  can  so 
easily  be  expanded  into  fifty  thousand,  into  five  hun- 
dred thousand.  And  cooperation  can  command  labor 
where  the  capitalist  producer  cannot,  for  it  can  afford 
to  pay  higher  wages. 

Will  there,  eventually,  be  a  fight,  a  bitter  life-and- 
death  struggle? 

Or  will  the  agricultural  producer  realize  some  day 
that  he,  too,  is  a  consimier? 

There  still  remain  a  few  words  to  be  said  regarding 
that  fourth  "  phase  "  of  cooperation :  mutual  credit, 
but  they  need  only  be  very  few.  Mutual,  or  cooper- 
ative, credit,  as  its  name  indicates,  consists  of  a  num- 
ber of  individuals  who  join  together  to  pool  their  sur- 


LIMITING  THE   FIELD  183 

plus  savings  with  the  purpose  of  eliminating  the  profits 
of  the  banker,  or  money  lender.  A  credit  society  is 
only  a  cooperative  bank,  the  profits  of  which  are  more 
or  less  equally  divided  between  lenders  and  borrowers. 
The  character  of  the  society  depends  entirely  on  the 
character  of  the  members. 

I  have  already  referred  to  the  German  Schulze- 
Delitzsch  societies  of  Germany,  which  have  spread  all 
over  Europe.  Here  the  members  are  chiefly  small 
tradesmen  and  manufacturers  who  pool  their  surplus 
capital  so  that  they  may  at  once  enjoy  the  highest  rate 
of  interest  and  lend  capital  to  those  of  their  associates 
in  temporary  need  at  the  lowest  rate  of  interest. 
There  the  act  of  association  begins  and  ends.  We 
may,  therefore,  without  further  discussion,  eliminate 
them  from  the  field  of  the  genuine  cooperative  move- 
ment. 

The  agricultural  cooperative  unions,  first  organized 
by  Reiflfeisen,  are  the  same  system  employed  among 
small  farmers,  a  modification  of  which  the  Department 
of  Agriculture  in  this  country  is  now  attempting  to 
introduce  among  American  farmers.  Among  the 
poorer  peasant  communities  of  Germany,  Austria, 
Hungary,  Russia,  and  the  Balkan  states  these  socie- 
ties have  been  very  beneficial  to  the  small  peasant  land- 
owners in  driving  out  the  village  money  lenders.  But 
as  the  object  is  supplying  capital  for  private  enter- 
prise, it  is  obvious  that  these  institutions  are  in  the 
same  class  with  the  Schulze-Delitzsch  banks  and  have 
nothing  in  common  with  our  consumers'  cooperative 
movement. 

In  large  cities  and  industrial  centers  credit  societies 
are  sometimes  organized  among  the  working  classes. 
These  are  much  in  the  nature  of  cooperative  savings 
banks.     They  usually  precede  the  appearance  of  the 


184  consumers'  cooperation 

cooperative  stores  because  they  require  very  little  skill 
or  effort  to  establish.  Quite  a  number  are  already 
established  in  this  country,  notably  in  New  York, 
where  the  Sage  Foundation  has  waged  a  strong  propa- 
ganda in  their  behalf,  as  "  encouraging  thrift  among 
the  lowly."  As  a  matter  of  fact  they  are  a  most  ef- 
fective weapon  against  the  loan  shark;  much  more 
effective  than  any  amount  of  legislation  could  ever  be. 

Societies  of  this  class  undoubtedly  have  a  close  affin- 
ity to  Consumers'  Cooperation.  But  where  the  regu- 
lar consumers'  societies  begin  to  appear,  they  disappear, 
the  consumers'  societies  taking  over  the  functions  of 
the  credit  societies  as  a  part  of  their  business.  There 
is  no  more  need  of  separate  organizations  for  banking 
than  there  is  for  the  supply  of  bread  or  onions  or  ham, 
except  when  cooperative  banking  is  federated,  or  cen- 
tralized, for  major  financial  operations  within  the 
movement.  Then  there  is  something  to  be  said  in 
favor  of  the  Russian  system,  as  against  the  British  sys- 
tem. To  have  the  financial  machinery  of  the  move- 
ment under  separate  control  should  have  the  tendency 
of  lessening  the  danger  of  bureaucracy,  in  that  it  would 
split  the  power  of  the  higher  officials,  as  a  body.  It 
is  well  that  those  who  spend  the  money  should  not 
also  have  the  strings  of  the  purse  in  their  hands.  But 
so  far  as  each  community  is  concerned,  there  is  no 
danger  of  concentrating  power  into  too  few  hands,  and 
the  local  society,  as  is  the  case  in  Great  Britain,  may 
well  handle  the  business  of  food  distribution,  banking, 
insurance,  and  even  housing,  all  on  the  same  cooper- 
ative basis. 

In  the  same  way  the  Reiffeisen  credit  societies  will 
also  tend  to  disappear  as  the  agricultural  sales  socie- 
ties become  bigger  and  extend  over  a  wider  territory 
of  activities. 


CHAPTER  II 

COOPERATION    AND   SOCIALISM 

In  contrasting  Consumers'  Cooperation  with  the  agri- 
cultural associations  I  think  I  have  at  the  same  time 
emphasized  the  revolutionary  character  of  the  former 
and  made  it  obvious  that  the  latter  are  an  integral 
part  of  the  capitalist  system.  Therefore  the  attitude 
of  Consumers'  Cooperation  toward  the  organized 
farmers  will  be  identical  with  its  attitude  toward  the 
whole  capitalist  system. 

And  what  is  that  attitude?  Is  it  open  attack? 
Have  we  here  the  class  struggle  of  the  Marxian  So- 
cialists? Will  this  opposition  of  interests  develop 
more  definitely  until  finally  the  climax  is  reached  and 
the  social  revolution  is  precipitated? 

Beyond  any  doubt  Consumers'  Cooperation  is  an 
anti-capitalist,  revolutionary  movement,  aiming  toward 
a  radical  social  reconstruction  based  on  an  all-inclusive 
collectivism.  Does  this  mean  that  it  is  standing  shoul- 
der to  shoulder  with  the  Socialist  parties  and,  with 
them,  is  fighting  for  the  total  destruction  of  capitalism? 

Between  the  Cooperator  and  the  political  Socialist 
there  is  undoubtedly  a  certain  degree  of  affinity.  The 
same  hatred  of  the  inequity  inherent  in  capitalism,  and 
the  desire  for  a  fundamental  democracy  that  shall 
penetrate  below  the  superficial  shell  of  a  mere  political 
government  animates  them  both.  They  go  even  fur- 
ther than  that  together,  for  both  attribute  all  industrial 
evils  to  the  same  cause :  the  institution  of  private  profit. 

185 


i86  consumers'  cooperation 

In  a  campaign  of  destructive  criticism  of  capitalism 
they  might  well  join  hands  and  work  together. 

But  when  they  come  to  constructive  action  their 
roads  part.  To  some  it  may  seem  that  these  diverging 
paths  join  again,  in  the  distant  future,  as  the  rising 
ground  overlooking  the  promised  land  is  reached.  If 
State  Socialism  is  the  final  goal  of  the  Socialists,  then 
obviously  there  is  no  prospect  of  future  reunion. 
Who,  for  a  moment,  imagines  that  the  British  Co- 
operators  will  hand  over  their  vast  flour  industry  or 
their  gigantic  shoe  factories  to  a  central  body  of  poli- 
ticians in  London  the  moment  the  Labor  party  cap- 
tures a  majority  of  the  seats  in  Parliament?  True, 
State  ownership  does  not  represent  the  ideal  of  all  So- 
cialists. But  in  so  far  as  complete  State  ownership 
and  monopoly  is  rejected  by  the  Socialists  themselves, 
the  modifications  are  in  the  direction  of  direct  control 
by  organized  groups  of  workers:  Syndicalism.  This 
tendency  hardly  travels  in  the  direction  of  Consumers' 
Cooperation.  That  theory  has  been  bitterly  fought 
before,  and  it  would  be  fought  again,  all  the  more  in- 
telligently and  stubbornly  because  of  past  experience, 
and  with  none  the  less  prospect  of  success  on  account 
of  the  greater  development  to  which  cooperation  would 
by  that  time  have  attained. 

Furthermore,  it  must  be  admitted  that  there  are 
some  spokesmen  for  Socialism,  among  them  such 
American  leaders  as  Morris  Hillquit  and  Meyer  Lon- 
don, who  foresee  the  influence  which  the  consumers' 
organizations  will  wield  when  once  Socialism  is  in  a 
position  to  begin  practical  reconstruction  and  are  will- 
ing to  admit  them  as  an  integral  part  of  the  general 
organization.  In  Great  Britain  Mrs.  Sidney  Webb,  a 
Fabian  Socialist,  recognizes  the  fact  that  whatever  ter- 
ritory the  Cooperators  possess  themselves  of  mean- 


COOPERATION    AND   SOCIALISM  187 

while  they  will  hold  when  once  Socialism  begins  taking 
control.  But  this,  to  her,  is  nothing  more  than  a  sort 
of  a  reservation  apportioned  to  a  friendly  tribe  of  In- 
dians and  will  cover  only  about  a  fifth  of  tjie  total 
industries. 

In  1910  an  international  Socialist  congress,  assem- 
bled in  Copenhagen,  passed  a  resolution  indorsing  Con- 
sumers* Cooperation,  urging  all  Socialists  to  join  con- 
sumers' cooperative  societies,  and  recognizing  them  as 
"  an  effective  weapon  in  the  hands  of  the  working 
classes  in  waging  the  class  struggle."  The  eighth  in- 
ternational cooperative  congress,  which  was  in  ses- 
sion at  the  same  time,  in  Hamburg,  on  receiving  the 
message  from  Copenhagen,  passed  a  resolution  of 
thanks,  "  without  any  reference  to  politics,"  but  it  did 
not  then,  nor  did  it  three  years  later,  at  Glasgow,  pass 
any  resolution  indorsing  Socialism. 

Does  Consumers'  Cooperation  recognize  that  basic 
doctrine  of  Marxian  Socialism,  the  class  struggle? 

Decidedly  not. 

From  the  point  of  view  of  the  Cooperator  there  is 
indeed  a  clearly  defined  cleavage  between  its  own  sys- 
tem of  industry  and  that  of  capitalism.  But  this  is 
not  a  class-to-class  struggle.  First,  consumers  are  not 
a  class.  That  personal  interest  which  draws  the  indi- 
vidual into  the  membership  of  the  consumers'  organi- 
zations is  equally  live  and  equally  pertinent  to  every 
member  of  society.  If  there  are  multitudes  who  have 
not  yet  joined,  that  is  because  knowledge  of  cooper- 
ation has  not  yet  become  universal,  while  others  again 
attach  more  importance  to  their  special  class  interests, 
or  privileges.  The  interest  of  the  consumer  is  uni- 
versal, all-inclusive,  as  broad  as  the  earth  itself. 

On  the  other  hand,  capitalist  interests,  among  which 
we  may  include  those  of  the  agricultural  associations, 


i88  consumers'  cooperation 

are  not  uniform.  Indeed,  capitalism  is  broken  up  into 
countless  groups,  large  and  small,  each  of  which  is 
separated  from  all  the  others  by  the  same  chasm  which 
separates  them  all  together  from  Consumers'  Cooper- 
ation. To  the  stockholders  and  the  officials  of  the  big 
corporations  manufacturing  clothing  the  stockholders 
and  the  officials  of  the  big  shoe  manufacturing  compa- 
nies are  not  fellow  capitalists;  to  them  they  are  con- 
sumers. To  the  manufacturers  of  agricultural  ma- 
chinery all  farmers  are  consumers.  To  the  manu- 
facturer of  automobiles  John  D.  Rockefeller  himself 
is  only  a  consumer.  This  diversity  of  interests  pene- 
trates even  into  a  field  which  might  be  considered  a 
solid  whole :  agricultural  production.  Between  the 
very  associations  we  have  been  describing  there  is  this 
same  split.  As  a  concrete  instance,  among  the  Ameri- 
can wheat  growers  there  is  a  strong  sentiment  against 
the  Mexican  sisal  planters,  who  have  done  exactly  what 
the  wheat  growers  are  doing:  combined  in  an  agricul- 
tural association  and  raised  the  price  of  the  twine  which 
the  American  wheat  grower  must  use  for  binding. 
And  the  members  of  both  these  classes  of  agricultural 
association,  the  American  wheat  growers  and  the  Mex- 
ican sisal  planters,  are  in  their  turn  exploited  by  the 
Brazilian  coffee  planters,  who,  by  the  same  methods, 
have  raised  the  price  of  coffee. 

To  this  diversity  must  be  added  still  another  divi- 
sion breaking  into  the  very  groups  themselves,  setting 
individual  against  individual:  competition.  If  one 
shoe  manufacturer  recognizes  another  shoe  manufac- 
turer as  a  brother  capitalist,  as  he  does  in  his  manu- 
facturers' association,  deeper  down,  even  though  it  be 
only  subconsciously,  he  also  hates  him  as  a  rival. 
When  was  any  class  struggle  so  bitter  or  so  well  de- 
fined as  a  rate  war  between  railroads?    And  how 


COOPERATION    AND   SOCIALISM  189 

lavishly  have  the  orange  growers  of  California  spent 
their  funds  to  oust  the  Southern  European  orange 
growers  from  the  New  York  market.  What  is  a 
"  protective  "  tariff  but  a  legislative  measure  which  one 
capitalist  group  employs  to  harm  another  capitalist 
group  ? 

From  so  divided  a  camp  cooperation  has  so  far  had 
nothing  to  fear.  True,  as  I  have  recorded  in  my  nar- 
rative, there  have  been  violent  clashes,  and  there  will 
probably  be  bigger  fights  in  the  future.  But  when  the 
meat  interests  of  Glasgow  attacked  the  Scottish  Whole- 
sale with  so  much  determination,  they  may  have  had 
the  sympathy  of  the  private  shoe  and  the  private  cloth- 
ing interests,  but  they  certainly  received  no  material 
support  from  those  natural  allies.  In  still  earlier  days 
the  grocery  wholesale  merchants  of  England  attempted 
to  initiate  a  general  boycott  of  the  English  Wholesale 
Society,  which  was  then  a  mere  purchasing  agency. 
The  manufacturers  who  did  respond  to  this  appeal  were 
those  who  numbered  the  wholesale  merchants  among 
their  chief  customers,  but  the  coal-mining  interests 
and  the  railroad  interests  were  not  even  aware  of  the 
movement.  And  when  the  Swedish  Wholesale  Society 
quietly  broke  up  the  Swedish  sugar  trust,  there  was 
no  indication  at  the  time  that  the  Swedish  bankers 
were  even  mildly  interested.  On  the  contrary,  a  na- 
tional parliament,  presumably  composed  of  a  majority 
of  "  capitalist  party  "  representatives,  administered  to 
the  fallen  food  combine  a  few  extra  kicks  for  luck. 

On  the  other  hand,  cooperation  has  no  need  to  at- 
tack the  capitalist  groups.  When  special  interests,  suf- 
fering under  immediate  competition  with  some  newly 
established  cooperative  enterprise,  have  ventured  to 
deliver  their  futile  assaults  on  the  cooperative  citadel, 
cooperation  has  indeed  struck  back,  sometimes  by  eco- 


190  CONSUMERS     COOPERATION 

nomic  action,  as  in  the  case  of  the  Scottish  Cooperators, 
who  built  their  own  soap  factory  when  the  Sunlight 
Soap  Company  attempted  to  dictate  to  them,  and  again 
in  the  form  of  propaganda.  But  it  would  be  illogical, 
and  more  than  likely  it  would  also  retard  the  movement 
harmfully,  were  the  cooperative  movement  to  adopt  an 
aggressive  policy  in  its  attitude  toward  capitalist  in- 
dustry. On  the  contrary,  in  the  case  of  the  agricul- 
tural associations,  where  the  capitalist  element  is  so 
diffused  among  a  g^eat  number  of  individuals,  it  is  to 
the  interest  of  cooperation  to  travel  slowly  and  with 
careful  steps.  First,  it  must  consolidate  and  organize 
all  that  it  has  before  it  advances.  Salients  are  espe- 
cially dangerous  to  cooperation.  Its  whole  line  should 
advance  together.  These  are  technical  reasons.  Then 
there  is  the  human  reason :  that  whatever  radical 
changes  cooperation  creates  in  individual  industries 
should  be  accomplished  as  gradually  as  possible,  so 
that  the  minimum  amount  of  harm  may  be  worked  to 
the  individuals  directly  concerned,  even  though  those 
individuals  be  capitalists. 

For  the  interest  which  permeates  the  whole  cooper- 
ative movement  spreads  over  and  through  the  units  of 
capitalism  as  well.  As  a  devotee  of  private  profit  the 
farmer  may  be  opposed  to  the  cooperative  movement, 
but  as  a  human  being  he  is  also  a  consumer,  therefore, 
to  the  conscious  Cooperator,  a  prospective  brother  and 
a  fellow  member.  A  consumer  he  always  has  been 
and  always  must  be ;  a  farmer  in  business  for  himself 
he  need  not  always  be.  It  would  be  the  height  of 
folly  for  the  cooperative  organization  to  rouse  his  ani- 
mosity to  fighting  heat  before  he  has  had  a  chance 
to  consider  fully  whether  his  social  interests  or  his 
class  interests  predominate.  The  longer  he  has  to 
consider,  the  more  thoroughly  he  has  the  practical 


COOPERATION    AND   SOCIALISM  IQI 

working  out  of  cooperation  demonstrated  to  him,  the 
more  likely  he  is  finally  to  decide  in  favor  of  his  social 
interests. 

Thus  cooperation,  in  contrast  to  the  political  action 
of  the  Socialists,  advances  by  means  of  economic 
action.  True,  considering  capitalism  as  a  mere  sys- 
tem, it  will  be  harmed  by  this  process,  perhaps  even- 
tually destroyed  as  an  institution.  Its  growth  will 
first  be  checked,  then  it  will  suffer  from  starvation. 
In  the  field  of  manufacturing  this  process  is  already 
clearly  indicated  in  Great  Britain.  The  Cooperators 
are  already  in  possession  of  the  biggest  flour-milling 
plants  in  the  kingdom.  These,  first  of  all,  have  al- 
ready limited  the  profits  of  the  private  millers  by  com- 
petition. As  they  increase  in  number  and  output,  pri- 
vate milling  will  gradually  come  to  a  standstill,  until 
finally,  when  over  half  the  population  is  using  coopera- 
tive flour,  as  one-fourth  is  already  using  it,  private 
flour  mills  will  no  longer  be  established  and  every  old 
one  going  out  of  business  will  tend  to  decrease  the 
private  flour-milling  industry.  But  so  gradual  is  this 
change,  or  transformation,  that  nobody  is  suffering  in 
consequence.  Presumably  the  superintendent  of  the 
big  cooperative  flour  mills  at  Newcastle,  now  the  sal- 
aried servant  of  the  cooperative  movement,  would  have 
been  a  prominent  flour  manufacturer  and  a  capitalist, 
had  cooperation  never  appeared,  but  he  would  prob- 
ably be  the  first  to  deny  that  thereby  any  harm  had 
been  done  him. 

In  the  field  of  agriculture  this  process  has  hardly 
made  a  beginning.  The  few  thousand  acres  of  tea 
lands  owned  by  the  British  Cooperators  have  probably 
not  reduced  the  membership  of  the  tea  planters'  asso- 
ciation in  Ceylon  by  more  than  two  or  three  dozen 
individuals;  the  ten  thousand  acres  of  wheat  land  in 


192  CONSUMERS     COOPERATION 

Canada  perhaps  will  represent  from  fifty  to  a  hun- 
dred vacancies  in  the  wheat  growers'  associations  of 
Canada.  Nevertheless,  even  so  little  is  enough  to  in- 
dicate the  path  that  cooperation  will  travel  through  the 
field  of  agricultural  production.  Here  enough  has 
been  established  in  actual  fact  on  which  to  base  deduc- 
tions worth  volumes  of  abstract  theories  by  the  wisest 
social  philosophers.  It  establishes  the  principle  that 
land,  the  original  source  of  the  production  of  the  ne- 
cessities of  life,  shall  be  owned  collectively  and  con- 
trolled democratically  by  the  users  thereof :  the  people 
as  consumers. 

Using  our  facts  as  a  basis,  there  comes  the  tempta- 
tion to  build  a  Utopia,  after  the  fashion  of  Bellamy 
and  H.  G.  Wells.  Developing  them  with  the  aid  of  a 
little  imagination,  we  might  paint  a  picture  of  the  co- 
operative commonwealth  of  the  future,  a  consumers' 
paradise.  And,  after  all,  is  that  so  violent  a  leap  of 
the  imagination,  from  a  cooperative  movement  in 
Great  Britain,  including  nearly  a  third  of  the  total 
population,  to  the  same  movement,  including  the  total 
population?  What  would  Great  Britain  be  like  under 
universal  cooperation? 

But  such  a  finished  picture  I  do  not  care  to  consider. 
Bellamy's  socialized  state  has  always  seemed  to  me  a 
sort  of  an  idealized  Prussia,  nor  do  I  believe  any  Co- 
operator  would  view  such  an  ending  as  anything  but 
tragic.  Herein  lies  a  fundamental  spiritual,  or  psycho- 
logical, difference  between  Socialism  and  cooperation. 
Marxian,  or  revolutionary,  Socialism  would  be  grimly 
complete.  It  is  based  on  the  principle  of  all  or  noth- 
ing, in  its  purest  manifestation. 

Not  so  cooperation.  Cooperation  is  a  voluntary 
movement.  It  is  opposed  to  the  idea  of  conscription. 
Between  the  industrial  system  which  would  include 


COOPERATION    AND   SOCIALISM  1 93 

999  socialized  flour  mills  and  one  private  flour  mill,  and 
the  industrial  system  which  would  include  all  of  the 
1,000  socialized  flour  mills,  there  is  the  diflference  be- 
tween two  universes. 

The  Socialist  would  create,  or  take  over,  a  whole 
industry;  then,  by  legislative  enactment,  completely 
destroy  all  competition.  He  would  create  a  State 
monopoly. 

Theoretically  cooperation  would  accomplish  the 
same  end ;  that  is,  the  complete  socialization  of  a  g^ven 
industry  by  means  of  cooperation.  But  it  would  al- 
ways leave  the  door  open  to  the  private  capitalist  who 
could,  or  thought  he  could,  carry  on  business  in  com- 
petition with  the  socialized  industry.  The  attitude 
of  cooperation  would  be  that  if  the  private  capitalist 
were  successful  in  his  attempt,  then  there  would  be 
sufficient  ground  for  an  investigation  into  the  admin- 
istration of  the  socialized  industry. 

Cooperation  would  not  appeal  to  the  arbitrary  meth- 
ods of  legislation  to  remove  its  opponents  from  the 
field.  If  it  overcomes  them,  it  will  do  so  in  open  com- 
petition on  a  fair  field,  and  the  victory  it  achieves  will 
be  through  its  own  inherent  superiority  over  its  op- 
ponents. In  the  economic  arena  it  feels  itself  irre- 
sistible, competent  to  meet  all  attacks.  Cooperation 
has  no  need  to  appeal  to  political  action  to  establish 
itself. 

And  this  is  a  fact  which  the  Socialists  refuse  to 
recognize ;  that  legislation  may  regulate  a  new  social 
order,  as  it  develops,  but  it  cannot  create  a  new  social 
order.  The  traffic  policeman,  representing  municipal 
law,  may  ease  the  congestion  of  the  street  traffic  by 
reguiating  it,  to  a  limited  extent.  But  finally  the  street 
must  be  broadened,  and  then  the  policeman  is  relegated 
to  the  background,  until  the  laborers  and  the  builders 


194  CONSUMERS     COOPERATION 

and  the  architects  and  the  engineers,  dealing  with  ma- 
terial substances,  have  done  their  work  and  gone  away. 

Capitalism,  as  an  industrial  system,  was  not  legis- 
lated into  existence,  and  it  will  not  be  legislated  out  of 
existence.  Capitalism  acquired  its  power  and  con- 
solidated its  position  step  by  step ;  by  economic  action. 
It  is  by  just  this  same  evolutionary  process  that  co- 
operation will  acquire  supreme  power  and  take  the 
place  of  capitalism.  Once  in  position,  capitalism  did 
indeed,  through  its  political  parties,  regulate  condi- 
tions. The  enactment  of  corporation  laws  followed 
corporations;  it  did  not  precede  them.  Capitalism 
has  also  employed  legislation  in  rendering  its  position 
more  secure;  all  anti-labor  laws  are  of  this  nature. 
When  the  Socialists  propose  to  lift  a  new  social  system 
into  place  through  legislation,  they  are  in  the  position 
of  the  man  who  would  lift  himself  by  his  own  shadow. 

But  this  is  not  to  say  that  cooperation  must  entirely 
ignore  politics ;  that,  too,  would  be  a  dangerous  course. 
Hitherto  it  has  done  so,  outside  Belgium.  But  in  191 7 
the  British  cooperative  movement  definitely  declared 
for  participation  in  politics,  and  in  Russia  cooperation 
during  the  Kerensky  regime  took  the  same  attitude. 
It  is  significant  that  in  neither  case  did  this  action  con- 
sist of  affiliation  with  the  Socialist  parties. 

For  cooperation  must  necessarily  have  a  political 
program  of  its  own.  First  of  all,  it  must  defend  it- 
self against  restrictive  legislation,  such  as  was  passed 
in  Germany  against  the  movement.  It  was  the  need  of 
doing  this  that  drove  the  British  Cooperators  into 
politics.  Food  regulation  having  become  so  promi- 
nent a  state  function  during  the  war,  the  British  Gov- 
ernment appointed  on  the  various  food  administrative 
boards  men  closely  associated  with  the  big  capitalistic 
interests  of  the  country.     These,  naturally,  have  taken 


COOPERATION    AND   SOCIALISM  1 95 

all  the  measures  in  their  power  to  harm  the  cooperative 
movement.  Their  influence,  together  with  that  of  the 
capitalistic  representatives  in  Parliament,  was  suffi- 
ciently strong  to  impose  a  tax  on  profits  which  was 
made  to  extend  to  the  surpluses  of  the  cooperative 
societies,  which  is,  of  course,  not  profit  at  all.  It  was 
to  protect  itself  against  such  unjust  measures  that 
British  cooperation  went  into  politics. 

Secondly,  cooperation,  as  it  creates  new  social  con- 
ditions, must  exercise  its  political  power  in  regulating 
the  new  conditions,  as  capitalism  did  during  its  prog- 
ress. Being  founded  on  a  universal  social  interest,  this 
will  be  a  simpler  task  than  that  with  which  capitalism 
had  to  contend,  within  whose  fold,  as  already  pointed 
out,  there  are  so  many  conflicting  interests  to  be  ad- 
justed. Formerly  this  was  done  through  individual 
legislators,  looking  to  the  cooperative  vote  through 
other  parties,  or  disinterested  partisans  of  the  move- 
ment. One  of  the  most  definite  tasks  before  the  co- 
operative members  of  Parliament  will  be  the  enact- 
ment of  a  great  deal  of  labor  legislation.  Coopera- 
tion, which  not  only  stands  for  trades-union  conditions 
in  its  own  establishments,  but  attempts  to  grant  more 
than  these  conditions  demand,  finds  itself  seriously 
handicapped  in  the  competition  which  the  private  in- 
dustries are  able  to  exercise  in  this  field.  Obviously 
it  cannot  pay  much  higher  wages  than  the  private 
manufacturer,  without  making  the  consumer  pay 
higher  prices.  Through  legislation  cooperation  can 
force  the  capitalist  to  meet  it  on  equal  conditions  where 
labor  is  concerned.  Here  the  cooperators,  naturally, 
will  find  the  Labor  party  a  strong  ally,  and  already 
the  Labor  party  has  paved  the  way  in  this  direction 
some  distance  ahead.  Cooperation,  too,  in  all  coun- 
tries, naturally  stands  squarely  for  free  trade;  it  is 


196  consumers'  cooperation 

against  any  sort  of  tariffs,  protective  or  otherwise. 
Indeed,  Mrs.  Sidney  Webb  says  that  England's  poHcy 
of  free  trade  has  been  chiefly  due  to  the  subterranean 
influence  of  the  cooperative  movement.  Now  it  may 
exercise  its  influence  directly,  therefore  more  effec- 
tively. It  will  also  be  obvious  that  cooperation  would 
always  be  inclined  to  support,  and  perhaps  initiate, 
such  legislation  as  would  tend  in  the  direction  of  the 
Single  Tax. 

But  again  I  emphasize  the  fact  that  this  is  all  sec- 
ondary matter  to  the  cooperative  movement ;  the  cav- 
alry to  its  main  army,  as  it  were,  skirmishing  ahead 
and  guarding  the  main  body  from  surprises.  While 
the  Socialist  pins  all  his  faith  to  his  political  vote,  as 
a  citizen,  the  Cooperator  exercises  his  power  chiefly 
through  his  economic  vote,  as  a  consumer.  Here 
minorities  may  exercise  their  proportionate  degree 
of  power  without  having  to  wait  for  ignorant  majori- 
ties. Here,  too,  there  is  universal  suffrage.  For  even 
the  old  grandmother,  as  she  sips  her  tea,  may  decide 
whether  or  not  capitalism  shall  have  the  support  of  the 
twenty  per  cent,  profit  on  that  tea.  This  vote  she 
may  exercise  every  day  of  the  week,  as  often  as  her 
health  and  purse  will  permit.  Even  the  baby  has  a 
vote,  in  the  milk  it  sucks  from  its  bottle,  though  this 
vote,  it  must  be  admitted,  papa  or  mamma  probably 
casts  as  a  proxy.  These  are  the  votes  which  really 
matter  to  the  capitalist  system,  and  which  shall  decide 
its  fate.  And  the  capitalist  realizes  it;  witness  the 
millions  he  spends  in  campaigning  for  such  votes,  not 
once  in  four  years,  but  day  by  day,  in  the  acres  of 
newspaper  space  he  devotes  to  advertising. 

But  though  we  may  refuse  to  contemplate  such  ab- 
solute Utopias  as  the  Socialist  would  impose  on  us  by 
majority  vote,  there  is  no  reason  why  we  may  not 


COOPERATION    AND   SOCIALISM  1 97 

attempt  a  tentative  survey  of  the  probable  limits  to 
Avhich  cooperation  may  some  day  extend.  Being  based 
on  the  volition  of  individuals,  it  is  hardly  conceivable 
that  cooperation  will  ever  become  absolutely  universal. 
Capitalism,  though  it  is  now  at  the  apex  of  its  power, 
has  not  completely  abolished  the  handicrafts.  And 
why,  in  fact,  should  not  the  man  with  a  new  inven- 
tion or  a  new  device  have  the  right  to  exploit  it  com- 
mercially? Why  should  there  not  always  be  room 
for  the  private  publisher,  not  only  of  books,  but  of 
periodicals  based  largely  on  the  expression  of  per- 
sonal opinion?  Some  means  there  must  always  re- 
main open  to  personal  criticism  of  public  affairs,  and 
the  organization,  or  organizations,  controlling  pub- 
lic affairs,  no  matter  how  democratic  their  principles, 
should  be  the  last  to  control  the  press.  This  prin- 
ciple is  embodied  in  the  fact  that  in  Great  Britain  The 
Cooperative  Nezcs,  the  official  organ  of  the  British  Co- 
operative movement,  is  owned  and  controlled  by  an  in- 
dependent cooperative  organization.  Universal  co- 
operation would,  indeed,  make  for  a  radical  modifica- 
tion in  our  present  system  of  periodical  publication 
by  removing  the  foundation  on  which  it  is  now  sup- 
ported :  advertising.  It  is  not  unlikely  that  private 
publications  would  have  to  look  largely  to  their  sub- 
scribers for  financial  support,  but  the  increased  sub- 
scription rates  would  perhaps  not  be  out  of  proportion 
*  to  the  increased  prosperity  of  the  masses. 

Then  why  should  we  abolish  the  man  with  original 
designs  in  furniture,  in  wall  papers,  in  rugs,  or  in  pot- 
tery, who  might  open  a  little  business  of  his  own  and, 
on  the  strength  of  his  own  individuality  in  creative 
work,  venture  to  compete  with  the  more  conventionally 
designed  and  more  uniform  products  of  the  coopera- 
tive factories?     Why  should  not  the  inventor  of  a  new 


198  consumers'  cooperation 

and  useful  device  have  the  monopoly  of  his  own  in- 
vention for  a  period  of  years  and  by  virtue  of  this 
monopoly  establish  a  new  industry?  By  the  time  the 
patent  right  had  expired,  he  would  have  gained  his 
just  reward  and,  if  the  importance  of  the  industry 
warranted  it,  it  could  be  taken  over  by  the  coopera- 
tives. Or  he  might  sell  it  to  them  in  the  beginning. 
These  are  merely  tentative  suggestions,  outlining  the 
possible  boundaries  between  the  private  and  the  public 
industries. 

The  same  would  apply  to  agriculture,  perhaps  more 
widely.  Capitalism  to  this  day  has  not  penetrated 
agriculture  to  the  same  extent  that  it  has  permeated 
the  manufacturing  industries.  The  small  farmer  of 
the  present  is  in  actual  fact  nothing  more  than  the 
master  craftsman  of  a  century  ago.  To  the  extent 
that  labor-saving  machinery  may  be  applied  to  agri- 
culture on  a  big  scale,  as  in  the  production  of  the 
grain  crops,  or  potatoes,  cotton,  fruits,  etc.,  we  may 
look  for  an  extensive  development  of  consumers'  co- 
operative agriculture.  The  reaper,  the  harvester,  and 
the  tractor  are  the  logical  tools  of  a  collective  body. 
We  may  even  look  to  cooperative  industry  including 
the  herding  of  vast  flocks  of  sheep  or  herds  of  swine 
and  cattle,  and  so  prolonged  an  operation  as  the  pro- 
duction of  timber,  once  the  natural  forests  are  de- 
pleted, would  naturally  come  under  the  head  of  pub- 
lic enterprise.  Local  cooperatives  will  also  engage, 
as  they  are  in  fact  beginning  to  do  now,  in  extensive 
truck  gardening  in  their  own  immediate  localities. 

But  to  the  enthusiastic  horticulturist,  who  may  not 
choose  to  engage  in  the  public  service,  and  who  can 
produce  a  more  delicious  peach  than  is  grown  in  the 
vast  public  orchards,  there  should  always  remain  open 


COOPERATION    AND    SOCIALISM  I99 

a  remunerative  market.  The  poultryman  who  devotes 
himself  to  the  breeding  of  superior  fowl,  the  gardener 
who  can  produce  a  frost-defying  cucumber,  or  who 
can  impart  special  flavor  to  a  strawberry :  these  are 
men  who  may  defy  any  social  system.  It  is  only  the 
big  operator  of  hundreds  of  thousands  of  acres  on 
the  one  hand,  and  the  poor,  plodding  farmer  of  no 
special  ability  and  with  a  perpetual  mortgage  over 
his  head  who  will  be  eliminated.  Both  will  be  reduced 
to  the  status  of  social  servants,  and  who  shall  say 
that  the  latter  will  suffer  thereby? 

Cooperation,  because  of  its  very  bigness  and  breadth, 
cannot  ever  entirely  eliminate  private  enterprise.  Its 
legitimate  territory  is  within  the  older  and  the  bigger 
industries.  Private  enterprise  belongs  to  the  newer 
and  the  smaller  industries,  where  markets  are  limited 
and  human  ingenuity  may  have  full  scope.  The 
boundary  between  this  broad  center  of  collectivism 
and  this  outer  fringe  of  capitalism  will  be  determined 
by  economic  laws;  certainly  it  should  not  be  fixed  by 
legislation.  By  economic  laws  I  mean  competition, 
in  its  best  sense.  The  trouble  with  modern  capitalism 
is  that  it  is  ceasing  to  be  competitive.  If  the  private 
manufacturer  can  produce  chairs  and  tables  more  pleas- 
ing in  design  to  a  certain  number  of  people  than  the 
chairs  and  tables  turned  out  by  vast  cooperative  factor- 
ies, which  would  not  be  unlikely,  those  certain  people 
will  patronize  him,  even  though  his  prices  may  be 
higher,  which  would  be  inevitable.  But  the  moment 
he  attempts  large-scale  production  he,  too,  will  learn 
that  artistic  tastes  differ  and  so  he  will  be  reduced 
to  conventional  designs.  It  is  then  that  he  will  find 
himself  unable  to  compete  with  the  cooperative  fac- 
tories, because  his  creative  talent  will  no  longer  be 


200  CONSUMERS     COOPERATION 

an  asset  to  him.  Thus  his  growth  to  undesirable 
size  will  be  limited  by  economic  laws,  without  the  need 
of  legislation. 

The  contrast  between  Cooperation  and  Socialism, 
however,  goes  below  these  outward  manifestations  of 
principle  or  method,  down  into  a  fundamental  differ- 
ence of  underlying  human  psychology,  which  is  too 
subtle  to  be  easily  defined. 

Throughout  all  social  organization  two  conflicting 
tendencies  invariably  manifest  themselves.  In  this 
country  Thomas  Jefferson  represented  one ;  Alexander 
Hamilton  the  other.  One  represented  what  is  com- 
monly called  "  states'  rights,"  while  the  other  stood 
for  Federalism,  centralization.  Jefferson  stood  for 
the  individual;  Hamilton  for  the  State. 

The  conflict  of  principle  between  these  two  men  is 
universal.  Only  ten  years  ago  the  organized  revo- 
lutionists of  far-away  Macedonia,  knowing  absolutely 
nothing  of  Jefferson  or  Hamilton,  were  on  the  point 
of  flying  at  each  other's  throats  over  this  issue;  whether 
a  central  committee  should  be  all-powerful,  or  whether 
it  should  be  merely  a  clearing  house  of  proposals  for 
joint  action  between  local  organizations. 

This  split  runs  down  through  the  whole  history  of 
the  revolutionary  labor  movement.  It  manifested  it- 
self when  the  first  definite  mass  organization  was  at- 
tempted, in  a  quarrel  between  Marx  and  Bakunin. 
Marx,  though  a  Jew  by  blood,  was  a  German  by 
psychology;  Bakunin  was  a  Russian.  Each  was  a 
representative  of  the  psychology  of  his  people.  Had 
Bakunin  possessed  a  more  logical  mind  he  might  have 
caused  the  split  in  the  international  revolutionary  labor 
movement  to  divide  it  more  equally.  But  his  misty 
doctrines  turned  away  all  the  practical-minded,  and 
only  the  extremists,  those  guided  wholly  by  intuition, 


COOPERATION    AND    SOCIALISM  201 

separated  themselves  from  the  SociaHsts  and  called 
themselves  Anarchists. 

Yet  Bakunin's  intuition  reached  higher  into  the  rari- 
fied  atmosphere  of  human  liberty  than  did  Marx's  more 
pretentious  structure  of  scientific  reasoning.  There  is 
a  certain  grim  logic  about  Socialism,  but  unfortunately 
human  liberty  cannot  entirely  be  built  on  logic.  The 
assumption  that  conditions  which  will  make  one  mil- 
lion human  individuals  happy  must  necessarily  make 
two  millions  of  individuals  happy  is  perfectly  logical 
—  but  absolutely  untrue. 

To  my  mind  the  recent  great  war  between  Prussian- 
ism  and  the  rest  of  civilized  mankind,  considered  in  its 
broadest  aspect,  is  this  same  conflict  assuming  universal 
scope  in  a  world  awakening  to  democracy.  Marx,  La- 
salle,  and  Engels  were  Germans,  and  their  doctrines 
were  based  on  a  German,  a  Prussian,  psychology.  Be- 
tween Lasalle  and  Bismarck  there  was  an  affinity  which 
had  practical  results.     Each  influenced  the  other. 

Under  the  pacifism  of  the  majority  of  pres- 
ent-day Socialists  of  those  countries  at  war  with  Ger- 
many there  is  a  deep  psychological  basis.  For 
under  an  outer  shell  of  imperialism  Germany  had 
developed  a  social  system  which,  in  essential  char- 
acteristics, was  truly  Socialistic.  Not  Emperor  Wil- 
liam or  even  the  Crown  Prince  were  attempting  to 
overpower  mankind ;  behind  that  attempt  there  was 
an  impulse  born  before  either  of  them.  It  was  the 
German  people,  inspired  by  an  ideal  which  they  would 
enforce  on  the  rest  of  the  world  by  a  force  no  less  arbi- 
trary than  the  force  of  political  majority  rule,  and  no 
less  unjust,  no  less  undemocratic.  To  the  extent  that 
this  German  ideal  had  spread  to  other  countries,  to 
that  extent  there  was  sympathy  for  Germany's  efforts 
in  the  "  enemy  countries,"  manifesting  itself  in  the 


202  CONSUMERS     COOPERATION 

attitude  of  the  various  Socialist  parties,  in  greater  or 
lesser  degree.  The  split  which  this  attitude  has 
brought  about  in  the  various  organizations  is  only  a 
continuation  of  the  split  which  sundered  Marx  and 
Bakunin. 

Herein  lay  the  strength  of  the  German  armies 
against  superior  numbers.  They  were  inspired  by  an 
ideal  which,  however  repellent  it  may  be  to  most  of 
us,  is  still  a  social  ideal,  and  not  mere  greed  for  con- 
quest. Their  efficiency,  their  solidarity,  their  devo- 
tion to  logical  completeness,  their  very  disregard  of 
the  rights  of  individuals,  are  all  dominating  qualities  of 
Socialism. 

It  was  their  failure  to  understand  this  that  defeated 
Trotzky  and  Lenin  in  their  attempt  to  revolutionize 
the  Germans.  For  though  they  and  their  Bolsheviki 
following  are  Socialists  in  name,  temperamentally  they 
are  Russian,  therefore  Bakuninites,  Anarchists.  Their 
whole  policy  of  internal  organization,  based  on  the 
local  Soviets,  their  principle  of  "  self-determination," 
their  early  ideal  of  a  Russian  Federal  Union,  and, 
finally,  -their  willingness  to  compromise  with  the  co- 
operative organizations,  all  proclaim  what  one  who 
knows  the  Russian  mental  attitude  toward  society 
might  already  know.  The  Russian  ideal,  presented 
to  the  German  masses  through  the  tons  of  literature 
passed  over  the  fraternizing  military  fronts  during 
the  Brest-Litovsk  peace  negotiations,  made  little  im- 
pression on  the  Germans.  Eventually  the  German 
masses  did  revolt,  but  it  was  not  to  join  the  Russian 
Bolsheviki,  but  to  bring  the  war  to  a  close.  Later, 
when  "  Bolshevism  "  did  manifest  itself  to  a  minor 
degree  in  the  Sparticide  uprisings,  those  same  Ger- 
man revolutionists  turned  on  them  and  suppressed  them 


COOPERATION    AND   SOCIALISM  2O3 

unmercifully,  murdering  their  two  chief  leaders  with 
ferocious  cruelty. 

I  realize  that  there  will  be  no  little  protest  on  the 
part  of  most  Americans  against  an  attempt  to  prove 
affinity  between  Thomas  Jefferson,  Michael  Bakunin, 
and  Lenin,  even  though  this  include  recognition  of 
Jefferson's  mind  as  the  clearer  of  the  three.  But  there 
is  this  in  common  between  them :  each  instinctively 
recognizes  the  superiority  of  the  individual  over  the 
State;  while  Lasalle  and  Marx  raise  the  State  above 
the  individual.  Jefferson  would  have  authority  initiate 
from  below,  mounting  upward.  Marx  would  concen- 
trate it  in  a  center,  radiating  outward  and  downward. 
Jefferson  was  a  democrat.  Marx,  at  best,  was  only  a 
republican.  And  he  could  even  accept  imperialism  as 
an  inessential  detail. 

If  I  seem  to  have  digressed  it  has  only  been  to 
create  a  broader  foundation  for  a  clear  understanding 
of  the  true  psychology  of  cooperation.  Cooperation 
is  based  on  a  conception  which  Jefferson  first  defined 
and  which  Bakunin  tried  to  elaborate.  To  this  ex- 
tent they  were  the  inspired  prophets  of  cooperation. 

For  cooperation  would  base  all  social  authtority  on 
the  individual,  the  local  group,  and  would  delegate  this 
authority  to  central  bodies  only  through  federation  for 
special  purposes.  It  abhors  centralization  and  cen- 
tralizes only  such  institutions  as  have  outgrown  local 
conditions.  It  makes  for  efficiency,  certainly,  but  it 
does  not  make  efficiency  an  aim  above  social  happiness. 
For  it  is  based  on  the  happiness,  the  free  will,  of  the 
individual.  It  desires  to  include  no  one  it  cannot 
benefit.  It  rejects  the  theory  that  what  is  good  for 
nine,  is  good  for  ten.  It  has  no  passion  for  logical 
completeness;  it  has  no  desire  to  become  so  universal 


204  CONSUMERS     COOPERATION 

that  every  individual  shall  be  included  within  its  sys- 
tem. When  cooperation  has  spread  just  so  far  as  it 
can  benefit  human  beings,  it  will  stop,  and  be  perfectly 
content  to  stop.  Within  cooperation  there  is  no  im- 
pulse to  extend  the  authority  of  one  group  over  an- 
other, much  less  to  extend  any  authority  to  outside 
elements.  But  on  the  other  hand  it  is  bitterly  opposed 
to  the  intrusion  of  outside  authority  within  its  own 
domain.  Outsiders  may  devise  whatever  social  sys- 
tems they  may  choose,  but  they  must  be  careful  not  to 
bump  the  corners  of  their  systems  against  the  sides  of 
cooperation.  Cooperation  is  the  very  antithesis  of 
imperialism.     It  is,  in  short,  Anarchism  rationalized. 


CHAPTER  III 

COOPERATION    AND   LABOR 

There  remains  still  one  great  social  force  whose  rela- 
tion to  Cooperation  I  have  not  yet  considered,  and  that 
is  labor.  Being  the  most  important,  I  have  left  it  to 
the  last. 

Socialism,  ostensibly,  is  based  on  the  class  interest 
of  labor,  but  this  is  only  true  to  the  degree  that  it 
becomes  modified  away  from  State  Socialism.  State 
Socialism,  obviously,  is  based  on  citizenship,  and  would 
only  benefit  the  worker  as  a  member  of  society,  and 
this  quality  it  has  in  common  with  cooperation.  For 
this  reason  many  Socialists,  whose  conceptions  of  so- 
cial justice  are  based  entirely  on  labor,  desire  to 
modify  State  Socialism  in  the  direction  of  Syndicalism, 
whereby  they  would  have  the  organized  workers  in 
each  industry  share  in  the  control  with  the  State. 
Traveling  in  this  direction,  we  finally  come  to  Syn- 
dicalism, which  does  not  recognize  the  interests  of  so- 
ciety at  all,  but  only  those  of  the  organized  workers, 
with  a  strong  preference  to  unskilled  labor.  And  as 
the  Socialist  tends  in  this  direction,  so  does  he  lose 
faith  in  political  action  and  inclines  to  rely  on  in- 
dustrial action ;  continuous  and  general  strikes, 
sabotage  and  even  violent  revolution.  The  social 
scheme  proposed  by  the  Syndicalists,  if  anything  so 
crude  may  be  termed  a  scheme,  is  that  the  workers 
themselves  shall  control  each  industrial  plant  on  a 
democratic  basis,  cohesion  in  the  general  management 
of  all  the  industries  being  accomplished  by  means  of 

205 


2o6  consumers'  cooperation 

federation.  Some  Syndicalists  would  modify  this  by 
forming  joint  central  committees,  or  commissions,  with 
representatives  of  society  in  general.  Nevertheless, 
Syndicalism  considers  labor  the  predominating  in- 
terest in  society  and  would  subjugate  all  others  to  it. 

This  brings  us  back  to  the  Christian  Socialists,  and 
while  it  may  seem  absurd  to  attempt  to  prove  affinity 
between  Charles  Kingsley,  a  church  prelate,  and 
Thomas  Hughes,  author  of  "  Tom  Brown's  School 
Days,"  on  the  one  hand,  and  the  syndicalist  leader 
James  Larkin  and  our  own  William  Haywood,  of  the 
I.  W.  W.,  on  the  other,  their  ultimate  social  ideals  were 
almost  identical.  Their  differences  were  only  in 
method.  Instead  of  the  general-strike  methods  of 
the  I.  W.  W.,  Kingsley  and  Hughes  believed  in  the 
economic  development  of  the  self-governing  work- 
shop to  universal  dimensions,  and  when  they  saw  the 
impossibility  of  making  any  headway  by  such  means, 
they  advocated  a  quiet  revolution  within  the  territory 
of  capitalism  itself,  through  profit  sharing,  a  form  of 
partnership  between  the  worker  and  the  capitalist 
wherein  they  hoped  that  the  worker  would  ultimately 
squeeze  his  partner  out  of  the  premises.  With  this 
basis  for  social  reorganization,  cooperation,  as  we  have 
already  seen,  has  no  sympathy.  When  such  Syndicalist 
leaders  as  James  Larkin  proclaim  themselves  champions 
of  cooperation,  it  is  only  because  they  do  not  grasp  the 
true  basis  of  cooperation. 

At  first  glance  it  would  seem  that  cooperation  has 
nothing  to  offer  Labor,  as  such.  The  forty  or  fifty 
thousand  workers  employed  in  the  productive  plants 
of  the  two  British  Wholesale  Societies  present  no  strik- 
ing contrasts  to  working  conditions  in  any  large  capi- 
talist factory  under  liberal  management.  They  do,  in- 
deed, average  higher  wages,  shorter  hours,  and  they 


COOPERATION    AND    LABOR  207 

enjoy  better  sanitary  conditions,  but  they  have  no  voice 
in  the  management  and  may  be  discharged  at  the  will 
of  their  employer.  At  this  point,  therefore,  there  is 
little  data  to  be  discovered  from  which  to  draw  deduc- 
tions. This,  to  many  Socialists,  would  be  conclusive, 
but  in  reply  I  can  only  point  out  that  the  condition  of 
workers  in  the  post-office  departments  or  among  the 
street  cleaners  of  our  large  cities  is  not,  by  the  Social- 
ists themselves,  considered  evidence  of  what  conditions 
will  be  under  a  universal  system  of  State  ownership, 
and  that  no  less  an  authority  than  Mrs.  Sidney  Webb, 
herself  a  State  Socialist,  has  pointed  out,  in  a  report 
on  **  An  Inquiry  into  Alternatives  to  Capitalist  Indus- 
try "  (1914),  conducted  by  the  Fabian  Society,  and 
published  in  the  New  Statesman,  that  the  average  pay 
of  the  workers  in  the  cooperative  factories  was  higher 
than  the  wages  of  those  in  State  employ,  and  that  their 
working  hours  were  shorter. 

But  in  spite  of  this  capitalistic  aspect  to  working 
conditions  in  the  cooperative  wholesale  factories,  it 
is  notable  that  in  all  general  labor  disputes  the  Whole- 
sale Societies  have  instinctively  allied  themselves  with 
the  organized  workers.  During  the  big  English  coal 
strike  in  191 1  the  banking  department  of  the  English 
Wholesale  Society  financed  the  striking  organizations 
by  advancing  them  money  on  securities  which  the 
private  bankers  had  refused  to  accept,  and,  incidentally, 
the  Wholesale  Society's  bank  dates  its  biggest  expan- 
sion from  that  time,  because  of  the  patronage  of  labor 
organizations.  A  more  striking  illustration  was  fur- 
nished during  the  Dublin  strike,  in  1913.  The  in- 
formation had  come  to  England  that  the  striking  dock 
workers  were  on  the  point  of  capitulating  from  starva- 
tion. Quick  action  was  demanded,  if  they  were  to  be 
helped.     The  British  labor  unions  appealed  to  the  Eng- 


2o8  consumers'  cooperation 

lish  Wholesale,  which,  at  twenty-four  hours'  notice, 
loaded  one  of  its  own  ships  to  the  hatches  with  provi- 
sions and  sent  it  into  Dublin  harbor  to  the  relief  of  the 
starving  strikers.  The  mad  enthusiasm  of  the  crowds 
which  lined  the  dock  at  which  the  C.  W.  S.  steamer 
was  moored,  their  frenzied  demonstrations  of  joy,  the 
lines  of  hungry  women  and  children  which  were  sup- 
plied with  food  at  the  very  gangways  of  the  steamer, 
formed  one  of  the  few  picturesque  scenes  in  the  history 
of  a  movement  little  picturesque  in  itself.  The  reader 
will  recall  a  similar  incident  regarding  the  Maison  du 
Peuple  of  Brussels,  related  in  the  chapter  on  Belgian 
Cooperation. 

And  whatever  the  dispute  between  the  Bolsheviki 
and  the  Russian  Cooperators,  Lenin  at  any  rate  does 
not  deny  cooperation  its  place  in  the  labor  movement. 

Why  this  instinctive  sympathy  for  labor  on  the  part 
of  an  organization  which  is  itself  one  of  the  biggest 
employers  of  labor?  Is  it  the  character  of  the  mem- 
bership, which  is  almost  entirely  recruited  from  the 
ranks  of  Labor?  Beyond  doubt  that  is  one  very 
strong  factor,  but  the  true  reason  goes  even  deeper 
than  that. 

Cooperation  is  a  labor  movement  fundamentally, 
but  this  only  becomes  obvious  when  we  regard  it 
broadly,  taking  in  its  original  impulses  with  a  wide 
sweep. 

But  before  proceeding  further  it  becomes  necessary 
to  define  Labor  more  accurately.  The  average  Syn- 
dicalist considers  only  the  factory  bench  workman  or 
the  unskilled  wielder  of  the  pick  and  shovel  as  a  legiti- 
mate candidate  for  membership  in  his  organization. 
At  one  time  there  were  some  organizations  which  ad- 
mitted only  enough  "  intellectuals  "  to  edit  their  official 
organs.     Now  there  is  a  general  inclination  to  draw 


COOPERATION    AND    LABOR  209 

the  line  between  productive  and  unproductive  labor, 
but  obviously  this  is  not  strictly  carried  out,  for  other- 
wise the  I.  W.  W.  organizations  in  the  West  would 
institute  a  strict  inquiry  into  the  use  to  which  the 
copper  of  the  Montana  mines  was  being  put  before 
admitting  the  miners  to  membership,  excluding  those 
who  were  mining  copper  destined  for  the  munitions 
factories.  In  personal  conversation,  Emma  Goldman, 
who  is  more  Syndicalist  than  Anarchist,  told  me  that 
she  regarded  productiveness  as  the  true  basis  for  a 
definition  of  Labor,  yet  considered  a  diamond  cutter 
a  legitimate  member  of  the  working  classes,  while  the 
overworked  reporter  of  a  newspaper  she  regarded  only 
as  a  capitalistic  parasite. 

Modern  Socialists  and  Trade-Unionists,  however, 
are  inclining  daily  toward  a  more  scientific  definition, 
or  interpretation,  of  the  word  labor,  as  witness  the  re- 
cent inclusion  of  "  and  brain  workers." 

Under  Labor  we  may  properly  include  all  those  who 
live  by  labor;  those  whose  means  of  livelihood  are 
dependent  on  the  remuneration  they  receive  for  service 
rendered,  regardless  of  its  social  value.  Thus,  an  ad- 
miral is  as  entitled  to  be  classified  as  a  worker  as  a  hod- 
carrier,  while  a  pushcart  peddler,  speculating  on  the 
profits  of  his  sales,  is  obviously  not  a  worker.  One 
lives  by  effort,  the  other  by  speculative  trade.  One 
works  for  a  wage,  the  other  strives  for  profit.  That 
the  personal  sympathy  of  the  admiral  may  be  with 
capitalism,  as  it  probably  is,  while  the  pushcart  peddler 
may  be  the  secretary  of  a  Socialist  local,  which  is 
not  unlikely,  does  not  change  the  economic  status  of 
either.  The  status  of  worker  or  capitalist  is  in  the  na- 
ture of  the  source  of  his  income;  whether  that  be  from 
physical  or  mental  labor,  or  whether  it  be  from  trade 
profits,  rents,  interest  on  invested  capital. 


2IO  CONSUMERS     COOPERATION 

Accepting  this  definition,  it  becomes  plain  that,  in 
so  far  as  cooperation  tends  to  eliminate  capitalism,  to- 
gether with  its  chief  ingredient,  private  profit,  it  also 
tends  to  increase  the  numbers  of  the  working  class. 
The  hundreds  of  thousands  of  small  storekeepers 
whom  it  has  already  caused  to  disappear  in  the  ter- 
ritory it  has  invaded  have  reappeared  as  store  man- 
agers or  clerks  in  cooperative  stores;  social  servants 
on  a  wage  basis,  therefore  workers.  This  it  has  done 
in  the  domain  of  manufacturing  as  well,  though  not 
to  the  same  extent,  because  there  its  advance  has  not 
been  so  extensive. 

This  same  end  —  the  transformation  of  all  members 
of  society  into  workers,  and  toward  which  cooperation 
only  progresses  by  degrees  —  Socialism  would  ac- 
complish by  one  fell  swoop.  Both  Cooperator  and  So- 
cialist contend  that  this  would  be  the  natural  result 
of  a  complete  abolition  of  private  profit  as  a  means 
of  subsistence,  and  obviously  if  you  cannot  live  off  in- 
terest or  dividends,  you  must  live  by  work.  Carry- 
ing out  the  cooperative  program  to  its  logical  con- 
clusion, this  would  mean  that  the  entire  membership  of 
all  the  cooperative  societies  would  consist  of  work- 
ers, organized  as  consumers.  Thus  the  workers  in  the 
cooperative  factories  would  be  their  own  employees 
and,  through  their  cooperative  societies,  would  have 
full  power  to  regulate  working  conditions  to  suit  them- 
selves. This  power  the  workers  in  the  wholesale  so- 
cieties' factories  already  have,  but,  of  course,  they  are 
now  only  one  per  cent,  of  the  total  membership,  the 
other  ninety-nine  per  cent,  being  employed  outside  the 
movement.  They  have,  therefore,  only  one  vote  out 
of  a  hundred  in  the  regulation  of  working  conditions 
in  their  factories,  and  if  the  other  ninety-nine  votes  are 
invariably  cast  in  their  favor,  it  is  only  through  sympa- 


COOPERATION   AND   LABOR  311 

thy,  and  not  through  direct  interest.  But  as  coopera- 
tive production  tends  to  increase  at  a  faster  rate  than 
the  membership,  this  ratio  of  one  to  one  hundred  will 
gradually  change,  with  one  hundred  to  one  hundred  as 
a  final,  though  perhaps  an  impossible,  ideal.  To  all 
practical  purposes  the  ideal  will  be  accomplished  when 
the  ratio  is  fifty-one  to  one  hundred,  and  that  is  well 
within  the  limits  of  possibility.  Such  a  situation 
would  give  the  cooperative  workers  a  majority  control 
of  their  own  working  conditions. 

For  the  purpose  of  indicating  tendencies,  however,  I 
shall  continue  to  argue  from  the  point  of  view  of  the 
ideal ;  the  possible  one  hundred  out  of  a  one  hundred. 
Here,  obviously,  the  workers  and  the  consumers  would 
be  completely  identical.  With  full  power  to  raise  their 
own  wages  as  workers,  there  would  be  no  incentive  to 
do  so,  for  the  cost  of  living  would  rise  automatically 
with  the  standard  of  wages.  Under  a  system  involv- 
ing production  for  use  only,  Labor  would  get  the  full 
product  of  effort,  and  there  would  be  no  question  of 
either  high  or  low  wages.  True,  a  certain  portion  of 
the  wealth  accruing  from  labor  might  be  utilized  in 
manufacturing  machinery,  or  building  new  factories,  or 
set  aside  in  the  national  treasury,  for  the  purpose  of 
carrying  on  future  productions,  but  all  this  would 
constitute  social  capital  and  would  eventually  revert 
to  labor  anyhow. 

At  the  present  time  the  product  of  labor  is  divided 
between  profit;  that  is,  dividends  on  invested  capital, 
interest,  rent,  etc.,  and  labor.  The  constant  dispute 
over  the  relative  portion  of  each  is  the  perpetual  strug- 
gle between  Capital  and  Labor.  The  tendency  of 
Capital  has  been  to  take  all  except  just  enough  to  keep 
Labor  alive  and  efficient.  Through  the  trade-union 
movement  Labor  has  succeeded  in  getting  a  little  more. 


212  CONSUMERS     COOPERATION 

but  while  granting  the  increase  in  wages,  the  capital- 
ist simply  retrenches  from  the  cost  of  living  by  charg- 
ing the  public  more  for  his  product,  so  that  the  trade- 
unionist,  as  the  American  Federation  of  Labor  has 
now  finally  come  to  admit,  simply  chases  himself 
around  in  a  circle,  while  the  capitalist  stands  outside 
the  ring  and  laughs  at  him.  Under  universal  coopera- 
tion this  leak  in  the  middle  would  be  stopped,  and  the 
relation  between  wages  and  the  cost  of  living  would 
be  fixed,  with  nothing  to  change  it  except  inefficiency 
and  waste. 

Summed  up,  and  considered  in  its  social  aspect,  as  a 
universal  institution,  cooperation  would  mean  the  peo- 
ple of  the  country  organized  as  consumers,  employing 
themselves  as  workers,  producing  their  own  needs  on 
a  basis  of  actual  labor  cost,  for  use  only.  Thus  not 
only  the  incentive,  but  the  means,  to  exploitation  of 
Labor  would  be  entirely  absent. 

Cooperation,  then,  would  establish  its  industrial 
democracy  on  the  basis  of  the  social  interests  of  the 
people  as  consumers.  It  places  consumption  as  the 
chief  end  of  society,  labor  being  merely  a  means  to 
that  end. 

The  Syndicalist  would  reverse  this  plan  by  organiz- 
ing society  on  the  labor  interests  of  its  units ;  it  would 
consider  lallxjr  as  the  chief  social  end,  with  consump- 
tion as  a  means  thereto,  an  entirely  secondary  matter. 
In  plainer  words,  the  Syndicalist  contends  that  we  eat 
that  we  may  work,  while  the  Cooperator  thinks  that 
he  works  because  he  must  eat. 

But  aside  from  this,  the  Syndicalist  bases  his  phi- 
losophy on  one  very  obvious  fallacy:  that  the  interests 
of  Labor  are  uniform,  homogeneous.  Which  is  a 
counterpart  to  the  Marxian  fallacy  that  the  interests 
of  the  capitalists  are  uniform.     In  actual  fact  the  same 


COOPERATION    AND    LABOR  i?I3 

diversity  of  interests  which  rends  capitalism  as  a  class, 
also  breaks  up  the  solidarity  of  Labor  as  a  class. 

Let  us  consider  the  Syndicalist  scheme  in  ideal  op- 
eration. The  miners  control  the  mines,  the  railway 
employees  control  transportation,  the  wheat  growers 
control  the  production  of  wheat.  Looked  at  from 
above,  they  are  indeed  all  workers,  each  trade  organ- 
ized by  itself,  managing  its  own  industrial  aflfairs. 

But  unfortunately  their  relations  with  each  other  do 
not  run  up  and  down,  but  laterally.  Each  trade,  or  in- 
dustry, is  surrounded,  not  by  fellow  workers,  but  by 
consumers.  The  miners,  in  guarding  their  rights, 
would  demand  as  high  a  price  as  possible  for  their 
coal  from  the  members  of  the  other  industrial  groups, 
the  transportation  workers  would  get  as  far  away  as 
possible  from  the  notion  that  the  general  public  should 
ride  in  the  trains  free,  while  the  wheat  growers  would 
not  only  demand  lower  freight  rates  from  the  trans- 
portation workers,  but  demand  top-notch  prices  from 
them  for  their  wheat. 

Truly,  says  the  Syndicalist,  this  will  all  be  adjusted 
by  central  councils,  who  will  regulate  these  slight  dis- 
crepancies of  interest.  But  these  councils,  represent- 
ing all  the  industrial  groups  together,  would,  as  fed- 
eral bodies,  really  represent  all  society  as  a  whole, 
which  would  be  the  consumers,  after  all.  Thus  the 
Syndicalist  himself  must  come  back  to  the  fact  that 
labor  is,  after  all,  subsidiary  to  society  as  a  whole. 

But  these  central  councils  would  have  only  slight 
power  presumably.  Suppose  the  transportation  work- 
ers should  come  to  an  open  disagreement  with  the 
council.  Closely  organized  as  they  would  be,  with 
discipline  developed  through  their  joint  management 
of  the  national  railroads,  they  would  have  a  power  in 
their  hands  capable  of  bringing  all  of  society  (the  rest 


214  CONSUMERS     COOPERATION 

of  the  labor  groups)  down  on  its  knees  before  them. 
And  who  shall  say  that  they  would  never  exercise  it, 
after  having  already  attained  power  through  such 
means. 

This  is,  of  course,  an  extreme  situation ;  it  certainly 
could  not  become  permanent.  But  the  social  equilib- 
rium would  constantly  be  disturbed  by  this  tendency 
on  the  part  of  the  big  and  powerful  trade  interests  to 
assert  themselves  against  the  rest  of  the  workers.  An 
industrial  democracy  founded  on  labor  is  no  democ- 
racy at  all,  since  the  true  basis  of  power  would  rest 
with  the  big  labor  organizations  operating  the  vital  in- 
dustries. This  power  they  might  never  exercise  vio- 
lently, but  in  a  more  subtle  way  it  would,  nevertheless, 
dominate  that  section  of  society  composed  of  the  minor 
labor  organizations. 

Cooperation,  on  the  other  hand,  is  not  entirely  free 
from  this  same  fault.  Under  universal  cooperation 
society  as  a  whole  would  dominate,  and  all  the  labor 
groups  would  be  subservient  to  it.  This  would  entail 
no  injustice  to  labor  as  a  whole,  because  all  members 
of  society  would  be  workers,  and  all  of  the  product  of 
labor  would  therefore  go  to  labor  since  none  would 
be  devoted  to  private  profit.  But  there  would 
always  be  the  possibility  of  dispute  between  one  trade 
and  another;  between  the  carpenters  and  the  miners; 
between  the  railroad  workers  and  the  wheat  growers, 
as  to  which  deserved  the  greater  remuneration.  Here 
is  a  cause  for  friction  which  probably  no  social  system 
could  ever  entirely  eliminate;  certainly  the  solution  is 
not  in  the  Syndicalist  plan  to  let  each  trade  group  fix 
its  own  remuneration. 

These  conflicting  interests  between  the  various  ele- 
ments and  classes  and  trades  within  Labor  itself  co- 
operation would  adjust  as  nearly  as  is  humanly  possi- 


COOPERATION    AND   LABOR  21$ 

ble  by  making  Labor  entirely  subsidiary  to  the  great 
motive  behind  it  —  consumption,  the  human  desire  to 
fulfill  the  needs  and  pleasures  of  life.  On  this  basis 
alone  can  a  true  democracy  find  a  uniform  founda- 
tion, for  it  is  the  one  interest  which  we  all  have  in 
common,  and  to  very  nearly  the  same  degree.  We  all 
need  shelter,  we  all  need  food,  we  all  need  clothing; 
the  demand  for  these  necessities  is  the  impulse  which 
sets  going  the  wheels  of  industry. 

Consumption  is  the  basis  of  all  industry,  for  it  is 
to  supply  our  needs  that  we  labor.  Not  only  is  con- 
sumption the  one  interest  we  all  have  in  common,  but 
it  is  also  the  most  vital  interest  of  each  of  us.  It  is 
essentially  a  personal,  a  human,  interest  distinct  from 
a  business  or  a  trade  interest.  In  fact,  it  is  the  only 
legitimate  economic  interest  that  any  human  being  may 
have.  The  moment  a  man  wants  to  possess  more  than 
he  can  consume,  or  use,  his  interests  are  opposed  to 
the  common  good.  There  is  nothing  anti-social  in 
desiring  to  possess  an  automobile  that  you  can  use. 
But  the  moment  you  want  to  possess  more  loaves  of 
bread  than  you  or  your  family  can  consume,  your  fel- 
lows should  keep  a  watchful  eye  on  you.  No  sane  man 
would  care  to  possess  more  than  is  useful  to  him,  in 
a  personal  sense,  unless  he  wished  to  gain  economic 
control  over  his  fellows. 

Consumers'  Cooperation  wants  to  establish  an  in- 
dustrial democracy,  as  universal  as  possible,  in  which 
all  shall  rule  the  social  industries  on  an  equal  basis, 
as  consumers.  As  consumers  we  shall  control.  As 
workers  we  shall  serve,  each  according  to  his  abilities, 
to  be  rewarded,  not  on  an  equal  basis,  nor  according 
to  the  time  he  works,  but,  as  near  as  human  justice  can 
fix  it,  according  to  the  value  his  labor  has  to  his  fellows. 
And  who  but  my  fellows  shall  determine  the  value  of 


2i6  consumers'  cooperation 

my  labor?  Who  but  those  who  eat  them  can  decide 
whether  the  loaves  of  bread  I  bake  are  eatable?  Who 
but  my  readers  shall  decide  whether  the  novel  I  write 
is  amusing  or  instructive  ?  And  who  but  the  consumer 
shall,  therefore,  determine  the  prices  ? 

Private  profit  having  been  abolished,  it  follows 
logically  that  I  shall  receive  the  full  product  of  my 
labor.  Collective  capital  having  displaced  private 
capital  in  the  public  industries,  there  will  be  no  inter- 
est or  dividends  to  be  sweated  from  Labor,  and  all  who 
would  consume  must  labor.  Under  cooperation 
human  society  will  be  like  one  person,  laboring  to  sup- 
ply its  own  needs,  whether  those  needs  be  purely  ma- 
terial, like  bread  and  meat,  or  of  a  spiritual  nature, 
like  art  or  music. 


THE  END 


INDEX 


Aberdeen  Cooperative  Society, 
during  war,  123 

Agricultural      cooperation      in 
America,  175 
defined,  176 
in  Switzerland,  180 
cooperative  societies  in  Rus- 
sia reactionary,  181 

American  Federation  of  Labor 
indorses  Cooperation,  166 

Ames,  Ernest  O.  F.,  151 

Anarchism  and  Cooperation, 
200-4 

Angst,  E.,  on  agricultural  co- 
operation in  Switzerland, 
180 

Anseele,  Eduarde,  founder  of 
Belgian  Cooperation,  108 

Australia,  Cooperation  in,  62 

Austria,  Cooperation  in,  during 
war,  128,  135 
wholesale  society  founded  in, 
62 


B 


Belgium,  Cooperation  in,  dur- 
ing war,  127 
wholesale  society  founded  in, 
62 

Bentleyville,  Pa.,  cooperative 
store  in,  158 

Bertrand,  Louis,  historian  of 
Belgian  Cooperation,  107 

Bohemia,  Cooperation  in,  106, 
128 

Bolsheviki  and  Cooperation,  60, 
140-1 

Boston,  Mass.,  167 

Brazilian  coffee  growers,  178 

Brighton  Cooperator,  The,  Dr. 
King's  organ,  15 

Brooklyn,  N.  Y.,  162 

Brownsville,  N.  Y.,  cooperative 
bakery  in,  163 

Buchez,  Philippe  Benjamin  Jo- 
seph, founder  of  self-gov- 
erning workshops,  43 

Budapest,  Sixth  International 
Cooperative  Congress  held 
in,  79 

Bugle  Horn  Colliery,  52 


Bakeries,  Cooperative,  102,  162 

Bakunin,  Michael,  200 

Bank,      English      Cooperative 

Wholesale  Society's,  35 
Moscow  Narodni,  140 
Banking,  Cooperative,  161,  183 
Basel,  Switzerland,  cooperative 

society  founded  in,  57 
Batley  woolen  mills,  91 


217 


Cahan,     Abraham,     editor     of 

New  York  Vorwdrts,  139 
California,  Cooperation  in,  158 
Canada,  wheat  growers  of,  179 
Capitalism,  development  of,  6 
Catholic    Church    and    Belgian 

Cooperation,   11 1 
Central  States  Cooperative  So- 
ciety, 158 


2l8 


INDEX 


Chauncelot  flour  mill,  Scotland, 

93 

Chartism,  23 

Chateau-Thierry,  cooperative 
society  in,  spared  by  Ger- 
mans, 125 

Chavez,  Gregorio,  pioneer  of 
Cooperation  in  Tampa, 
Fla.,  164 

Chicago,  111.,  headquarters  of 
National  Cooperative  As- 
sociation, 167 

Child  Labor,  5 

Christian  Socialists,  42,  67-8 
opposed  to  Socialism,  66 
as  early  exponents  of   Syn- 
dicalism, 206 

Clarke,  Dalton  T.,  158,  167 

Class  Struggle,  Cooperation 
and  the,  187 

Cobden,  Richard,  assists  co- 
operators,  31 

Cohn,  Hyman,  Cooperative 
pioneer  in  New  York,  152 

Congress,  Second  International 
Cooperative,  in  Paris,  74 
Third  International  Coopera- 
tive, in  Delft,  75 
Fourth      International      Co- 
operative, in  Paris,  76 
Fifth  International  Coopera- 
tive, in  Manchester,  78 
Sixth  International  Coopera- 
tive, in  Budapest,  79 
Seventh     International     Co- 
operative,  in  Cremona,  83 

Consumers'  Cooperation,  defi- 
nition of,  3,  172,  176 

Consumers'    Cooperative    pro- 
duction initiated,  loi 
theory  of,  54 

Consumers'  Cooperative  Union 
of  New  Jersey,  155 

Convention,  First  National  Co- 
operative, in  America. 
167 

Cooperative  Consumer,  The, 
155 


Cooperative  League  of  Amer- 
ica, The,  155-6,  166 
of  New  York,  The,  152 

Cooperative  News,  The,  organ 
of  British  Cooperation,  197 

Cooperative  Production,  Chris- 
tian Socialist  theory  of,  43 

Cooperative   source  of  supply, 
..42 

Cooperative  Wholesale  Society 
of  America,  St  Paul, 
Minn.,  159 

Cooperative  World,  The,  pub- 
lication in  Tampa,  Fla.,  166 

Co-partnership  and  Syndical- 
ism, 43 

Co-partnership  workshops,  fail- 
ure of,  52 
in  United  States,  54 
founded  in  France,  58 

Co-partnership  in  Belgium,  119 

Corn  laws,  22 

Credit  unions,  183 

Cremona,  Seventh  Interna- 
tional Cooperative  Con- 
gress in,  83 

Cruger,  Dr.  H.,  81 

Crumpsall,  first  cooperative 
factory  at,  48 


D 


Dairymen's  League  of  New 
York,  17s,  178 

Danville,  111.,  cooperative  so- 
ciety in,  157 

De  Boyve,  E.,  founder  of  In- 
ternational Cooperative  Al- 
liance, 64 

Delft,  Holland,  Third  Interna- 
tional Cooperative  Con- 
gress in,  75 

Denmark,  Cooperative  develop- 
ment in,  106 
first  cooperative  societies  in, 

62 
wholesale  society  founded  in, 
62 


INDEX 


219 


wholesale    society   fights    ce- 
ment trust,  100 
Dubhn  harbor  strike,  208 


East  St.  Louis,  Cooperation  in, 
158 


Farming,  Consumers'  Coopera- 
tive, 101,  104 

Federation,  First  attempts  at, 
in  England,  30 

Fenwick,  Scotland,  first  co- 
operative society  founded 
in,  13 

Finland,  Cooperation  in,  61 
wholesale  society  founded  in, 
62 

Fitchburg,  Mass.,  cooperative 
society  in,  162 

Florida,   Cooperation  in,   164 

Flour  milling.  Cooperative,  92 

France,  Cooperation  in,  57,  64, 
125,  137 

Franco-Beige  Cooperative  Soci- 
ety in  Lawrence,  Mass., 
117 

Free   Trade   and    Cooperation, 

Fruit  growers  of  California, 
177 


Gardening,  Cooperative  mar- 
ket, 104 

German  Cooperators  visit  Eng- 
lish Cooperative  Whole- 
sale Society  in  Manchester, 
76 

Germany,  Cooperative  move- 
ment in,  58-9,  62,  106,  134 

Goldman,  Emma,  her  definition 
of  Labor,  209 


Grangers  and  Cooperation,  147 

Gray,  J.  C,  Secretary  of  British 
Cooperative  Union,  78,  82 

Greening,  E.  O.,  49 

Grey,  Earl,  speech  at  Ninth 
International  Cooperative 
Congress  at  Glasgow,  84 

H 

Hernandez,  A,  R.,  165 

High  Cost  of  Living,  cause  of, 

41 
Hillquit,  Morris,  186 
Holland,   Cooperation  in,  dur- 
ing war,  138 
wholesale  society  founded  in, 

62 
Holyoake,  John  Jacob,   16,  24, 

42,  69,  71-2,  78 
Housing,  Cooperative,  104 
Hughes,  Thomas,  42 
Hull,  England,  first  cooperative 

corn  mill  founded  in,  14 
Hungary,  Cooperation  in,  128, 

136 
wholesale  society  founded  in, 

62 

I 

Illinois,   Cooperation  in,   156 
Governor    of,    supports    co- 
operation, 158 
State    Federation    of    Labor 
of,  156 

Industrial  and  Agricultural 
Cooperative  Association  of 
New  York,  154 

International  Cooperative  Alli- 
ance, 70,  80,  83 

Into  Cooperative  Society,  in 
Fitchburg,  Mass.,  162 

Italy,  Cooperation  in,  60 


Japan,  Cooperation  in,  62 
Jewish  Cooperators,  162 


220 


INDEX 


Kauffman,  Heinrich,  director 
of  German  wholesale  soci- 
ety, 79 

Kaulback,  John  G.,  founder  of 
American  Cooperation,  56, 

^45' 

Kerensky,  Russian  Premier, 
supports  Cooperation,  139 

King,  Dr.  William,  first  ex- 
ponent of  Consumers'  Co- 
operation, 14-16 

Kingsley,  Charles,  Christian 
Socialist,  42 

Knights  of  Labor,  149 

Koltchak  Government,  recog- 
nized by  agricultural  co- 
operative societies  in  Si- 
beria, 181 


Labor,  definition  of,  208 

under  Cooperation,  206,  214 
Larkin,  James,  206 
Lasalle,  Ferdinand,  40,  76 
Lawrence  strike,  41,  117 
Legislation    and    Cooperation, 

193 

Legislation  against  Coopera- 
tion in  Germany,  98 

Lenin,  Russian  Premier,  141 

London,  Meyer,  186 

Ludlow,  John,  42 

Lunn,  Carl,  160 

Luzzatti,  Luigi,  Italian  states- 
man and  Cooperator,  60, 
71.83 

M 

Machinery,  Invention  of,  5 

mobs  destroy,  7 
"  Maisons  du  peuple "  of  Bel- 
gium, 112 
Malthus,  Robert  Thomas,  econ- 
omist, 6 


Manchester,  Fifth  Interna- 
tional Cooperative  Con- 
gress in,  78 

Mann,  Thomas,  69 

Marx,  Karl,  200 

Massachusetts,  Cooperation  in, 
162 

Maurice,  Frederick,  Christian 
Socialist,  42 

Maxwell,  William,  13,  86-7 

McDonald,  Duncan,  156 

Meat  combine  fights  Scottish 
Wholesale  Society,  97 

Membership  of  national  coop- 
erative movements,  lOS, 
133 

Membership,  in  Great  Britain, 
increase  during  war,  132 

Minneapolis,  Minn,,  Coopera- 
tion in,  151 

Mitchell,  J.  J.  W.,  Chairman  of 
English  Wholesale  Society, 
87 

Monessen,  Pa.,  Cooperation  in, 
158 

Miiller,  Dr.  Hans,  16,  64,  69, 
72,  76,  80,  84,  173 


N 


National  Cooperative  Associa- 
tion, of  America,  167 

Neale,  Vansittart,  Christian 
Socialist,  42 

Nelson,  N.  O.,  American  Coop- 
erator, 75 

Newark,  N.  J.,  Cooperative 
bakery  in,  163 

New  England,  Cooperation  in, 
14s 

New  England  Protective 
Union,  146 

New  Jersey,  Cooperation  in, 
155,  162 

New  York,  Cooperation  in,  152 

Nimes,  French  cooperative  so- 
cieties founded  in,  64 


INDEX 


221 


Nonpartisan    League's    stores, 
i6o 

Northwestern  Cooperative  As- 
sociation, i6i 

Norway,  Cooperation  in,  io6 
wholesale  society  founded  in, 
62 


Profiteering,  Cooperation 

curbs,  122 
Prohibition    ajid    Cooperation, 

in  United  States,   146 
in  Belgium,  113 
Purity    Bakery,    in    Paterson, 

N.  J..  162 


Ouseburn    Company,    co-part- 
nership enterprise,  51 
Owen,  Robert,  4,  7,  9,  10,  12,  20 


Pacific  Cooperative  League,  151 
Paris,      Second      International 
Cooperative  Congress  held 
in,  74 
Fourth    International    Coop- 
erative   Congress    held    in, 

76        . 
cooperative  societies  founded 
in,  58 

Paterson,  N.  J.,  Cooperation  in, 
162 

Patrons  of  Husbandry  and  Co- 
operation, 147 

Pennsylvania,  Cooperation  in, 
158 

Pittsburgh,  Pa.,  Cooperation 
in,  158-9 

Plunkett,  Sir  Horace,  71-75 

Politics  and  Cooperation,  118, 
194 

Potter,  Beatrice,  see  Webb, 
Mrs.    Sidney 

Prices,  high,  cause  of,  41 

Production,  Consumers'  Coop- 
erative,  slow   progress   of, 

85 

Production,  cooperative  society 
in  Hamburg,  Germany,  124 

Profit,  abolished  by  Coopera- 
tion, 26 

Profit  sharing,  53,  70,  72 

Profiteer,  origin  of  word,  132 


R 


Recreation,      Cooperative,      in 

Belgium,  112 
Redfern,  Percy,  quoted  on  his- 
tory of  EngHsh  Wholesale 
Society,  52 
Reiffeisen  credit  unions   with- 
draw    from    International 
Cooperative   Alliance,  81 
described,  183 
Right-Relationship  League,  151 
Rochdale  plan  described,  25 
Rochdale  store,  growth  of,  29 
Rochdale  store  organized,  23 
Russia,  agricultural  cooperative 
societies  in,  181 
Cooperation  in,  during  war, 

128,  138,  142 
first  cooperative  societies  in, 

60 
wholesale  society  founded  in, 
62 
Russian   Cooperative   Purchas- 
ing Agency  in  New  York, 

143 
Russian   Cooperators  purchase 
United    States    army    sup- 
plies, 143 


Sage  Foundation  promotes 
credit  unions,  184 

St.  Paul,  Minn.,  Cooperation 
in,  159 

San  Francisco,  Cal.,  Coopera- 
tion in,  150 

Schulze-Delitzsch,  58 


222 


INDEX 


Schulze-Delitzsch    societies    in 
Germany,  58-9,  66,  183 
withdraw  from  International 
Cooperative  Alliance,  80 

Scotland,  Cooperation  in,  dur- 
ing war,   131 

Seattle,  Washington,  Coopera- 
tion in,  160 

Self-governing  workshops,  43, 
52,  54,  58,  119 

Serwy,  Victor,  Swiss  Cooper- 
ator,  78 

Shieldhall,  Scottish  Wholesale 
Society's  productive  works 
at,  89 

Shillito,  John,  chairman  of 
English  Wholesale  Society, 
87 

Ships  owned  by  English 
Wholesale  Society,  po,  92 

Single  Tax  and  Cooperation, 
196 

Soap  works  established  by 
English  Wholesale  Society, 
93 

Socialism  and  Cooperation, 
.i8s 

Socialism,  Christian  Socialists 
opposed  to,  65-6 

Socialists  turn  to  Cooperation, 
76 

Socialist  Convention,  National, 
in  Indianapolis,  indorses 
Cooperation,  154 

Socialists  at  Seventh  Interna- 
tional Cooperative  Con- 
gress, 83 

South  Africa,  Cooperation  in, 
62 

Sovereigns  of  Industry,  147 

Speculators,  Cooperation  curbs, 
122 

Springfield,  111.,  Cooperation  in, 

Springfield,  Mass.,  Cooperation 

in,  149 
Statistics,  general  Cooperative, 

IDS 


Staunton,  111.,  Cooperation  in, 

157 
Sweden,  Cooperation  in,  62,  138 
wholesale  society  founded  in, 

62 
wholesale    society    in,    fights 
trusts,  98-9 
Switzerland,  agricultural  coop- 
erative societies  in,  180 
Cooperation  in,  57,  106,  137 
wholesale  founded  in,  62 
wholesale  society  in,  crushes 
meat  trust,  100 
Syndicalism    and    Cooperation, 

205,  212 
Syndicalism    and    Co-partner- 
ship, 43 


Tampa,    Fla.,    Cooperation   in, 

164 
Tea,    production.    Cooperative, 

in  Ceylon,  loi 
Thisted,  Denmark,  first  cooper- 
ative society  in,  58 
Trade,  Cooperative,  Growth  of, 

los 
Trade  Unionism,  origin  of,  7 
Transportation,  Cooperative,  90 
Tri-State  Cooperative   Society, 

158-9 
Trust,     Cement,     crushed     by 

Danish  Wholesale  Society, 

100 
English        Soap,        English 

Wholesale  Society  crushes, 

94 
Scottish  soap,  fights  Scottish 

Wholesale  Society,  93 
Meat,     crushed     by      Swiss 

Wholesale  Society,  100 
Sugar,   crushed   by   Swedish 

Wholesale  Society,  98 

U 

Union,  British  Cooperative,  36, 
38,  66,  70 


INDEX 


223 


Vooruit    Cooperative     Bakery, 

founded  in  Ghent,  Belgium, 

109 
Vooruit,   growth    during   war, 

127 
Vorwdrts,     Jewish,     in     New 

York,  1 54-5 


W 

Walker,  John  H.,  156 

War,  effect  of,  on  cooperation, 

129 

German      Cooperators      de- 
nounce, 134 
Warbasse,  Dr.  James  P.,  155 
Washington,  State  of,  Cooper- 
ation in,  160 
Webb,  Mrs.  Sidney,  44,  45,  77, 
175,  186 


Wholesale    Society,    Austrian, 
during  war,  128 
Belgian,  120 
English,  31-35,  47,  76,  90,  95, 

loi,  123,  131 
French,  125,  127 
German,  124 
International,  138 
Russian,  128,  139 
Scottish,  88,  97,  131 
Wholesale       societies,       when 

founded  on  continent,  62 
Wolff,  Henry,  69,  75 
Workingmen's    Protective  Un- 
ion of  New  England,  146 


Ybor  City,  Tampa,  Fla.,  Coop- 
eration in,  164 


Zurich,  first  Swiss  cooperative 
society  in,  57 


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